Professional Documents
Culture Documents
in Judicial Recovery
Corporate Taxpayers ID (CNPJ/MF) 04.423.567/0001-21
Company Registry (NIRE) 33.3.0028402-8
Publicly-held Company
MINUTES OF THE EXTRAORDINARY SHAREHOLDERS MEETING HELD
ON AUGUST 26, 2015
I.
DATE, TIME AND VENUE: On August 26, 2015, at 2:00 p.m. at the
headquarters of ENEVA S.A. in Judicial Recovery (Company), at Praia do
Flamengo, n 66, Flamengo, in the City and State of Rio de Janeiro.
II.
CALL NOTICE: Call notices published in the Official Gazette of the State of
Rio de Janeiro, on August 11, 12 and 13, 2015 (pages 12, 3 and 12 respectively) and in
the Dirio Mercantil on August 11, 12 and 13, 2015 (pages 2, 5 and 2 respectively), as
provided for in Article 124, item II of Law n 6.404, as amended (Brazilian
Corporation Law).
III.
MANAGEMENT PROPOSAL: The Management proposal (Management
Proposal) containing the information and the documents necessary to exercise the
voting right at the shareholders meeting was made available to shareholders at the
Companys headquarters and published at the webpage of the Company, of the
Brazilian Securities and Exchange Commission, (CVM), of the BM&FBOVESPA
S.A. Securities, Commodities and Futures Exchange (BMF&FBOVESPA), on the
same date of the first publication of the call notice, pursuant to sole paragraph, Article 6
of CVM Rule 481 of December 17, 2009, as amended.
IV.
ATTENDANCES: Shareholders representing more than 92% of the Companys
voting capital stock, as per signatures on the Shareholders Attendance Book. Mr. Fabio
H. Bicudo, Chairman of the Companys Board of Directors, Mr. Alexandre Americano,
Chief Executive Officer, Mr. Ricardo Levy, Chief Financial and Investor Relations
Officer of the Company, Mr. Paulo Coimbra, representative of KPMG Corporate
Finance Ltda. (KPMG) and Mr. Marcio Santiago Gonalves, representative of G5
Consultoria e Assessoria Ltda. (G5 Evercore) also attended the meeting. This present
meeting was declared regularly installed after verifying the quorum required.
V.
PRESIDING BOARD: Pursuant to Article 25, Paragraph 1 of the Companys
Bylaws and Article 128 of Law n 6,404/76, the Chairman of the meeting will be Mr.
Fabio H, Bicudo who invited Mr. Joo Pedro Barroso do Nascimento to act as secretary.
VI.
three billion, six hundred, fifty million reais and ten centavos (R$3,650,000,000.10), by
means of the issue for private subscription of up to twenty-four billion, three hundred,
thirty-three million, three hundred, thirty-three thousand, three hundred and thirty-four
(24,333,333,334) non-par book-entry, registered common shares, with eventual partial
ratification in the event of subscription of, at least, two billion reais and ten centavos
(R$2,000,000,000.10), by means of the issue, of at least, thirteen billion, three hundred,
thirty-three million, three hundred, thirty-three thousand, three hundred and thirty-four
(13,333,333,334) non-par, book-entry, registered common shares, at the issue price of
fifteen centavos of Real (R$0.15) per share, as per Management Proposal (Capital
Increase); (ii) ratify the hiring of KPMG, as the institution liable for drawing up the
valuation report on shares issued by BPMB Parnaba S.A. for the purposes of Capital
Increase payment by Banco BTG Pactual S.A. (BPMB Valuation Report); (iii) ratify
the hiring of KPMG, as the institution liable for drawing up the valuation report on
shares issued by Parnaba Gs Natural S.A. (PGN) and Eneva Participaes S.A. in
Judicial Recovery (Eneva Participaes) for the purposes of Capital Increase payment
by DD Brazil Holdings S..R.L. (E.ON and E.ON Assets Valuation Report,
respectively); (iv) ratify the hiring of G5 Evercore, as the institution liable for drawing
up the valuation report on shares issued by Parnaba III Gerao de Energia S.A. for the
purposes of Capital Increase payment by Gemlik RJ Participaes S.A. (Parnaba III
Valuation Report); (v) ratify the hiring of G5 Evercore, as the institution liable for
drawing up the valuation report on shares issued by Parnaba I Gerao de Energia S.A.,
Parnaba IV Gerao de Energia S.A. and Parnaba Gerao e Comercializao de
Energia S.A. for the purposes of Capital Increase payment by Petra Energia S.A. (Petra
Assets Valuation Report); (vi) approve BPMB Valuation Report for the purposes of
payment of shares to be subscribed in the Capital Increase; (vii) approve E.ON Assets
Valuation Report for the purposes of payment of shares to be subscribed in the Capital
Increase; (viii) approve Parnaba III Valuation Report for the purposes of payment of
shares to be subscribed in the Capital Increase; (ix) approval of Petra Assets Valuation
Report for the purposes of payment of shares to be subscribed in the Capital Increase;
and (x) authorize the Companys Management to practice all the acts necessary to carry
out the Capital Increase, as well as the aforementioned resolutions.
VII. RESOLUTIONS: Pursuant to Article 25, Paragraph 3 of the Companys
Bylaws, the minutes of this Extraordinary Shareholders Meeting shall be drawn up in
summary format. The attending shareholders resolved, unanimously, to publish the
minutes of this Extraordinary Shareholders Meeting omitting the signatures of
attending shareholders, pursuant to Article 130 of Law n 6,404/76.
In view of the request made by FIA Dinamica Energia, Companys shareholder
representing the minimum percentage required by Article 2 of CVM Rule n 324 of
January 19, 2000 (ICVM 324/00), the proposal for installing the Companys Fiscal
Council, elect and define its members compensation was included in the agenda of this
Meeting.
The shareholder FIA Dinamica Energia proposed that the Agenda should be inverted so
as this matter would be the first item of the Agenda. This proposal was submitted to the
shareholders that rejected it, by majority vote of attendees, registering the dissenting
opinions and legal abstentions. Consequently, the original sequence of the Agenda will
be maintained and the deliberation about the Fiscal Council will be discussed in the end
of the meeting.
Continuing with the analysis and discussions on the matters of the agenda, the
shareholders resolved:
7.1
Referring to item (i) of the agenda, by majority vote of attendees, registering the
dissenting opinions and legal abstentions, to approve the Companys capital increase
totaling up to three billion, six hundred, fifty million reais and ten centavos
(R$3,650,000,000.10), by means of the issue for private subscription of up to twentyfour billion, three hundred, thirty-three million, three hundred, thirty-three thousand,
three hundred and thirty-four (24,333,333,334) non-par, book-entry, registered common
shares, with eventual partial ratification in the event of subscription of at least, two
billion reais and ten centavos (R$2,000,000,000.10), by means of the issue of at least,
thirteen billion, three hundred, thirty-three million, three hundred, thirty-three thousand,
three hundred and thirty-four (13,333,333,334) non-par, book-entry, registered common
shares, at the issue price of fifteen centavos of Real (R$0.15) per share, according to the
Management Proposal.
7.1.1 The new common shares shall have the same rights and privileges
of the Companys common shares, pursuant to the Companys Bylaws.
7.1.2 The subscription of new common shares issued by the Company
shall be subject to the creditors compliance or waiver of condition precedent
provided for in the Court-Supervised Reorganization Plan. Therefore, until these
conditions are fully executed or waived, as applicable, no notice shall be
disclosed to shareholders to initiate the subscription period.
7.1.3 Pursuant to Article 171, Paragraph 1, item a of the Brazilian
Corporation Law, shareholders shall be eligible to exercise the preemptive right
to subscribe the Companys shares within the scope of the Capital Increase, at
the ratio of 2,896.4595223% over their related shareholding on the publication
date of notice to shareholders.
the dissenting opinions and abstentions, to approve Petra Assets Valuation Report;
7.10 After the deliberations of the items in the Agenda, in view of the request made
by Companys shareholders representing the minimum percentage required by Article 2
of CVM Rule n 324 of January 19, 2000, the Companys Fiscal Council is installed,
pursuant to Articles 27 and 28 of the Companys Bylaws and Articles 161 and the
following of the Brazilian Corporation Law, to operate until the Annual Shareholders
Meeting to approve the accounts for the fiscal year to end on December 31, 2015. After
the Fiscal Councils installment, shareholders approved the election of 3 sitting
members of the Fiscal Council and respective deputies, by majority of votes, registering
a dissenting opinion and abstention, as follows:
7.10.1 In a separate vote pursuant to Paragraph 4, Article 161 of the Brazilian
Corporation Law, the Companys non-controlling shareholders, without the direct or
indirect participation of controlling shareholders, elected (i) Mr. Manuel Jeremias
Leite Caldas, Brazilian citizen, married, electric engineer, bearer of the identity card
number 284.123, issued by the Ministrio da Aeronutica, enrolled with the CPF/MF
under number 535.866.207-30, residing and domiciled in the City and State of Rio de
Janeiro, at Av. Lucio Costa no. 6.700, apto. 1103, as sitting member; and (ii) Mr.
Ronaldo Dias, Brazilian citizen, married, accountant, bearer of the identity card
number 2201087-0, issued by DETRAN/RJ, enrolled with the CPF/MF under number
221.285.307-68, residing and domiciled in the City and State of Rio de Janeiro, at Rua
Maxwell no. 452, apto. 604, CEP 20541-100, as his deputy.
7.10.2 As appointed by the Companys controlling shareholders, were elected:
(i) Mr. Evandro Csar Camillo Coura, Brazilian citizen, married, engineer, bearer of
the identity card number 43562, issued by CREA-RJ, enrolled with the CPF/MF under
number 729.695.397-72, residing and domiciled in the City and State of So Paulo, at
Rua Bela Cintra no. 968, conj. 12, as sitting member; and Mr. Mauricio Aquino
Halewicz, Brazilian citizen, married, economist, bearer of the identity card number
7049172823, issued by RS, enrolled with CPF/MF under number 694.701.200-78,
residing and domiciled in the City and State of So Paulo, at Alameda Casa Branca no.
1011, apto. 91, as his deputy; and (ii) Mrs. Lucia Maria Martins Casasanta, Brazilian
citizen, married, accountant, bearer of the identity card number RJ-076210/0-2, issued
by CRC/RJ, enrolled with CPF/MF under number 491.887.206-91, residing and
domiciled in the City and State of Rio de Janeiro, at Rua Gorceix no. 28, apto. 402, as
sitting member; and Mrs. Patricia Maria de Arruda Franco, Brazilian citizen,
married, accountant, bearer of the identity card number RJ-081950/0-7, issued by
CRC/RJ, enrolled with CPF/MF under number 011158067-69, residing and domiciled
in the City and State of Rio de Janeiro, at Rua Prudente de Morais no. 301, apto. 202, as
her deputy.
7.10.3 The shareholders who appointed the Fiscal Council members elected
herein declared these members have the qualifications necessary and they comply with
the requirements provided for by the Brazilian Corporation Law and in the Companys
Bylaws to perform the position as member of the Companys Fiscal Council. The Fiscal
Council members elected herein shall have term of office until the Annual
Shareholders Meeting to approve the accounts for the fiscal year to end on December
31, 2015.
7.10.4 The investiture of Fiscal Council members elected herein shall be subject
to (i) the submission of clearance certificates, pursuant to applicable laws, which are
prepared by the Company; (ii) the signature of instrument of investiture, drawn up in
the Companys records; and (iii) the signature of the Statement of Consent of Fiscal
Council members, pursuant to BM&FBOVESPAs Novo Mercado Rules.
7.11 The shareholders approved by majority of votes of the attendees, registering
dissenting opinions and abstentions, that the Fiscal Council shall have a monthly global
compensation of R$28.000,00 (twenty-eight thousand Reais).
7.12 The shareholder FIA Dinmica Energia, arguing the application of article 159,
1 of Brazilian Corporate Law, proposed the inclusion of a deliberation for civil
liability lawsuit against the Chairman of the Board of Directors in view of the
submission to the General Shareholders Meeting of the valuation reports which, in
accordance with FIA Dinamica Energia, do not serve the purpose which they were
supposed to, according to the terms of a separate vote presented by the shareholder.
Subsequently, the shareholders deliberated the matter and rejected such proposal by
majority of votes of the attendees, registering dissenting opinions and abstentions.
7.13 The General Shareholders Meeting scheduled for tomorrow (27/08/2015) has
been cancelled due to the fact that items in the respective agenda have all been decided
in this meeting.
7.14 Finally, the shareholders authorized the Companys management to take all the
measures necessary or convenient to carry out the Capital Increase and the
aforementioned resolutions.
VIII. MANIFESTATIONS, ABSTENTIONS AND DISSENTING OPINIONS:
The dissenting opinions and abstentions were registered, including those abstentions
from the shareholders: (i) E.ON in relation to items (i), (iii), (vi), (vii), (viii) and (ix) of
the Agenda, in view of the law and the decision issued by CVM Board in the meeting
held on August 25, 2015; (ii) BNDES Participaes S.A. BNDESPAR in relation to
the items which were not originally included in the Agenda of this meeting.
IX.
CLOSURE: Nothing else to be discussed, this Meeting was adjourned to draw
up these minutes, which were then read, approved and signed by attendees.
[This is a free Engligh translation of the minutes of the Extraordinary Shareholders
Meeting of ENEVA S.A. in Judicial Recovery, held on August 26, 2015, signed by all
shareholders and drawn up in the Companys records]
Rio de Janeiro, August 26, 2015.
_______________________________
Fabio Hironaka Bicudo
Chairman
_______________________________
Joo Pedro Nascimento
Secretary
Attachment I
Shareholders Attendance List at the Extraordinary Shareholders Meeting of August
26, 2015
Attending Shareholders
_______________________________
Eike Fuhrken Batista
Centennial Asset Mining Fund LLC
Centennial Asset Brazilian Equity Fund LLC
(p.p. Bernardo Daudt)
_______________________________
DD Brazil Holdings S.A.R.L.
(p.p. Carlos Barbosa Mello)
_______________________________
BNDES Participaes S.A. BNDESPAR
(p.p. Sara Alexandrino Nogueira)
_______________________________
Alexandre Americano H. e Silva
_______________________________
Fundo de Investimento Jabur Aes
Clube de Investimento OMNI II
Vida Feliz Fundo de Investimento em Aes
Spinelli Fundo de Investimento em Aes
(p.p. Caio Machado)
_______________________________
Fundo de Investimento de Aes Dinmica Energia
_______________________________
Spinelli Dividendos Fundo de Investimento em Aes
_______________________________
Jos Pais Rangel
_______________________________
Max Eduardo Heilborn
_______________________________
Joo Paulo Galatro Perrotta
_______________________________
Helena Maria Neves Puggina Ferraz
(p.p. Fabio de Souza Queirz Ferraz)
_______________________________
Norges Bank
(p.p. Talita Car Vidotto)
Attachment II
BPMB Valuation Report
CORPORATE FINANCE
ABCD
Phone
Fax
Internet
55 (21) 3515-9400
55 (21) 3515-9000
www.kpmg.com.br
Yours Sincerely,
Augusto Sales
Partner
2015 KPMG Corporate Finance Ltda., a Brazilian limited liability company and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity.
All rights reserved. Printed in Brazil.
Important Notes
On February 12th, 2015, Eneva and Eneva Participaes filed a Plan for
Judicial Recovery (JRP), in accordance with Article 53 of the Brazilian
Judicial Recovery Law. Within this context, Eneva JR seeks to initiate a
capital increase. Such potential capital increase envisages a change in Eneva
JRs shareholding structure, and, in case the JRP obtains full approval for
execution, such mutations in shareholding structure are planned to be made
through the following contributions: (i) cash; (ii) credit capitalization; (iii) and
asset subscription.
BPMB
Parnaiba_Info
Memo_v_09_01_2015.pdf,
BPMB
Parnaba_Model_KPMG_v5.xlsx, PGN-BPMB - Budget 2015 and Business Plan 2014-12-23.pdf Information related to the Gas Reserves under the Parnaba Basin,
Capex projection, Opex projection and SG&A for PGN and BPMB;
DFs BPMB Parnaiba 12-2014_6_04_2015.pdf BPMBs audited financial statement
FY2014;
PGN-BPMB - Budget 2015 and Business Plan - 2014-12-23.pdf Prospective
financial data related to BPMB, for which we have no reason to dispute the
underlying assumptions;
BPMB Parnaiba_Info Memo_v_09_01_2015.pdf, PGN-BPMB - Budget 2015 and
Business Plan - 2014-12-23.pdf Background information regarding BPMB valuation;
BPMB
Parnaiba_Info
Memo_v_09_01_2015.pdf,
BPMB
Parnaba_Model_KPMG_v5.xlsx, All internal presentations that describe the history,
nature of business, and outlook for BPMB; and
BPMB
Parnaiba_Info
Memo_v_09_01_2015.pdf,
BPMB
Parnaba_Model_KPMG_v5.xlsx, PGN-BPMB - Budget 2015 and Business Plan 2014-12-23.pdf Other pertinent information.
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
Important Notes
KPMG based its work on the information provided by the Information Providers
and/or other representatives of such Information Providers. Therefore, the
Client, including its Management, takes responsibility for all information
provided to or discussed with KPMG.
All estimates and projections herein presented have been provided by the
Information Providers; when necessary, such estimates and projections have
been adjusted by KPMG, according to its own judgment on their reasonability,
and are assumed to be underpinned by the Information Providers
managements best evaluation of the Companies and respective markets
best perspectives.
Any changes in the information provided by the Client and BTG to KPMG may
impact the results of this report. KPMG assumes no responsibility for updating,
reviewing or amending this report, as a result of the disclosure of any
information subsequent to the date of the issuance of this report.
This report has been elaborated according to the economic and market
conditions, among others, available as at the elaboration time period. The
conclusions herein presented, therefore, are subject to exogenous variations of
which KPMG does not have any control.
It is imperative to point out that this version of the valuation report is a free
translation from Portuguese to English; therefore, in case of discrepancies
between the report in Portuguese sent on April 13, 2015 and the free
translation report, the former shall prevail in all matters.
During the course of our work, we carried out analysis procedures whenever
necessary. However, we emphasize that our work did not constitute an audit of
the financial statements or of any other information provided by the Client or
BTG and should not be interpreted as such. Our work took into consideration
the relevance of each item, therefore, less relevant assets and liabilities were
not analyzed in detail. KPMG has not verified independently the information
provided by the Client, so, it cannot confirm the precision, accuracy and
sufficiency of such information and, therefore, the Client assumes all
responsibility for the information provided to KPMG.
The preparation of this report was based on our reliance, with the express
approval of the Client, on the accuracy, content, veracity, completeness,
sufficiency and integrity of the data provided to or discussed with KPMG. Thus,
KPMG has not inspected any asset, or prepared or obtained an independent
valuation of the Clients assets, liabilities, or its solvency. Therefore, the Client,
including its Management, takes responsibility for all information provided to or
discussed with KPMG.
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
Important Notes
The sum of the individual values herein presented may diverge from the
sums presented in this report, due to rounding issues.
Our valuation was made on the basis of events which can be reasonably
expected, and therefore does not take into account extraordinary and
unforeseeable events (new industry regulations, changes in tax laws, natural
catastrophes, major social and political events, nationalization etc.), which
may cause adverse effects on the Companies.
This report is not to be used as a sole basis for the evaluation of the
Company, for the report does not contain all necessary information for such
use. Therefore, this report is not to be interpreted as a proposal, solicitation,
suggestion, nor recommendation by KPMG for the Transaction. Any decision
taken by the Company shareholders shall be assumed integrally by the
same shareholders. KPMG will not take any responsibility as to the
Company shareholders decisions.
We emphasize that a valuation establishes a theoretical estimate within an
interaction involving a buyer and a seller, where both are intended to close a
deal, with the necessary access to all relevant information, and assuming that
neither parties have the immediate necessity to buy or sell. An effective
negotiation does not necessarily reflect such conditions, and may include
other elements; consequently, the estimated value need not be used in the
effective transaction.
This report does not envisage the satisfaction of any personal nor specific
interests. Thus, results from other evaluations, elaborated by third parties,
may diverge from our results. Notwithstanding, such divergence should not
be regarded as an inherent deficiency of the realized work.
The Company shareholders have to perform their own analyses regarding the
Transaction, through the consultation of their own financial, tax and legal
advisors, in order to define their own opinion as to the Transaction. This report
is to be read and interpreted with full consciousness of our already mentioned
restrictions. In addition, the reader must be aware of the restrictions and
characteristics of inherent to the Information Providers.
The scope of our engagement did not include the detection of fraud in the
Company operations, processes, records or documents.
The services performed herein may have been based on legal and
administrative rules. In this regard, we note that our legislation is complex and
often the same provision can be interpreted in multiple ways. KPMG always
seeks to be up-to-date on the various interpretative tendencies, in order to
permit a broad assessment of the alternatives and risks involved. Even so,
there may be some interpretations of the law that differ from ours. Under these
circumstances, neither KPMG, nor any other firm, can provide total assurance
that the Company will not be questioned by third parties or government
authorities.
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
Contents
Glossary
I. Executive Summary
11
14
17
V. Valuation Methodology
21
VI. Assumptions
26
IX. Valuation
35
40
44
46
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
Contents
ACL
ACR
ANEEL
ANP
BACEN or BCB
BCM
BMI
BM&F
BOVESPA
CAGR
CAPM
CCEAL
CCEAR
CCEE
COFINS
CoGS
CRP
CVM
CVU
D&A
DCF
EBIT
EBITDA
EBT
EIA
EIU
EMBI
EPE
ERP
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
Contents
E&P
GDP
GVB
GVR
GW
Giga Watt
IBGE
IFRS
INEA
IPCA
IRPJ
ITS
JRP
KPMG
LNG
MBA
MMBtu
MW
Mega Watt
MWh
M&A
NOPAT
NPV
ONS
Opex
Operational Expenses
O&M
PE
Private Equity
PIS
PLD
PPA
PPP
Public-Private Partnership
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
Contents
RGR
R$
Brazilian Real
R&D
RF
Risk Free
SE
Shareholders Equity
SELIC
SG&A
SPE
SUDENE
TPP or UTE
TCF
WACC
WC
Working Capital
BNDESPAR
BPMB
BTG
Cambuhy
Cambuhy Investimentos
Eneva JR
Eneva Participaes JR
E.ON
E.ON S.E.
PGN
OGX
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
Contents
Glossary
I. Executive Summary
11
14
17
V. Valuation Methodology
21
VI. Assumptions
26
IX. Valuation
35
40
44
46
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
I. Executive Summary
Introduction
Given the above mentioned context and background, the objective of our
work, in accordance with Clients request was to perform a valuation report
regarding to BPMB, in order to underpin the possible asset subscription.
BPMB
Parnaiba_Info
Memo_v_09_01_2015.pdf,
BPMB
Parnaba_Model_KPMG_v5.xlsx, PGN-BPMB - Budget 2015 and
Business Plan - 2014-12-23.pdf Information related to the Gas
Reserves under the Parnaba Basin, Capex projection, Opex
projection and SG&A for PGN and BPMB;
Our work used as basis the equity position and information obtained
prior to the date of issuance of this report.
It is important to point out that KPMG will not update this report after
the date of issuance.
BPMB Parnaiba_Info Memo_v_09_01_2015.pdf, PGNBPMB - Budget 2015 and Business Plan - 2014-12-23.pdf
Background information regarding BPMB valuation;
Subsequent events
Basis of information
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
10
I. Executive Summary
Summary of Results
Based on the scope of our report, and subject to the assumptions, restrictions, and limitations described herein, we have estimated the fair value of BPMB as at
December 31, 2014, as presented below.
Equity
Value per
share (R$)
Equity
Value 100%
(R$ MM)
1.80
655.48
-
1.88
688.17
1.97
720.86
+
The valuation of BTGs stake in BPMB (100%) as at December 31, 2014 ranges from R$ 655.5 million to R$ 720.9 million.
The valuation methodology applied in order to determined the value of BPMB was the discounted cash flow method (presented on pages 37to 39).
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
11
Contents
Glossary
I. Executive Summary
11
14
17
V. Valuation Methodology
21
VI. Assumptions
26
IX. Valuation
35
40
44
46
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
12
firms that provide Audit, Tax and Advisory services. KPMG International
provides no services. However, its member firms perform Audit, Tax and
Advisory practices (through the Audit departments, Tax and Advisory,
respectively). Together, KPMG International's member firms have more than
155 thousand employees across the world, and is present in 155 countries.
KPMG brand was created in 1987 from the merge of Peat Marwick
The approval of the report occurred only after it was reviewed by the
It does not entitle any shares of Eneva or BPMB, nor do its partners,
directors, officers, directors, controllers or persons related to them;
There are no commercial and credit relations that could impact the
Report;
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
13
Enel
State Grid
Mitsui & Co
2014
2014
2014
2014
2014
Dresser Rend
Equatorial Energia
Iberdrola
2013
2013
Vicel
2014
2014
SN Power
Brasympe
2013
2013
2013
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
2013
14
Contents
Glossary
I. Executive Summary
11
14
17
V. Valuation Methodology
21
VI. Assumptions
26
IX. Valuation
35
40
44
46
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15
BPMB
Consortiums information
The upstream consortium in the Parnaba Basin (Consortium) currently
operates 3 gas fields and 7 exploration blocks with a total approximate area
of 21 thousand square kilometers in the Maranho State.
Below is presented a simplified diagram of the Consortiums current
operation.
BPMB owns a 30% stake in the Consortium that holds the concessions of
7 blocks in the Parnaba Basin (21,000 km).
Current production from GVR field: c. 5.6 million m3/day.
The Consortium estimates reserves of more than 1 TCF (around 32.3
party geological studies were hired and results are expected for the 2nd
half of 2015.
The blocks operated by Parnaba Gs Natural (former OGX Maranho)
E.ON
Eneva JR
Cambuhy
Investimentos
BTG Patcual
18%
9%
73%
BPMB
PGN
Integrated project concept Gas to wire
UTE I (675MW), UTE III (178 MW) and UTE IV (56MW) are already in
operation. UTE II (517 MW) will be concluded in 2018; however, the PPA
will start only in 2016 because of the waiver granted by ANEEL.
Source: BTG
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100%
70%
30%
Consortium
16
BPMB
In 2015, the company will conduct an onshore drilling campaign in Brazil.
Discovered wells and new production wells will be drilled, which could allow
BPMB to increase production capacity by 70%, by July, 2016, to 8.4 million
cubic meters per day.
31/12/2013
31/12/2014
139.13
(68.51)
70.63
249.64
(119.66)
129.98
(15.49)
(13.86)
(0.32)
(1.54)
0.30
(30.92)
39.71
(29.76)
(3.66)
(7.03)
(0.15)
(40.59)
89.39
0.31
(2.81)
(2.50)
37.21
(9.62)
4.99
32.59
4.29
(5.64)
(1.35)
88.04
(25.69)
1.95
64.29
17
Contents
Glossary
I. Executive Summary
11
14
17
V. Valuation Methodology
21
VI. Assumptions
26
IX. Valuation
35
40
44
46
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International, a Swiss entity. All rights reserved.
18
Macroeconomic trends
GDP expanded meagerly in 2014 and more recent data suggest that
2,76
2,71
inflation and foster GDP growth. In March 2013 annual interest rate was
7.25%, the lowest in Brazil's history. From then on, there have been nine
consecutive hikes, and annual interest rate has reached 12.75%.
2,79
2,86
2,96
3,06
2,36
2,14
1,94
1,76
According to the Brazilian Central Bank, the forecasted GDP variation for
1,67
Projected
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
6,56
6,5
6,38
4,5
4,21
4,7
4,79
4,13
3,66
5,91
5,84
3,1
5,8
5,7
2,5
5,5
5,5
5,5
2,5
2,5
2,55
5,5
Projected
Projected
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: BCB (31/12/2014)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: Bloomberg (31/12/2014)
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19
Sources of energy
77% of the electricity in Brazil comes from hydraulic plants, which are
Others
Nuclear6%
2%
Biomass
7%
Natural gas
8%
Distributors:
Electricity
generation
matrix
Hydraulic
77%
a)
b)
c)
d)
Source: EPE
available for all producers, as long as the grids are interconnected and as
long as the producers pay transmission fees.
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20
Production
Reserves
In the next years, oil production in Brazil was expected to grow, thanks to
4.5
4,5
4.0
4,0
3.5
3,5
3.0
3,0
2.5
2,5
2.0
2,0
1.5
1,5
1.0
1,0
0.5
0,5
0.0
0,0
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
4
3
2
Projected
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Projected
Projected
180
160
140
120
100
80
60
40
20
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
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Projected
21
Contents
Glossary
I. Executive Summary
11
14
17
V. Valuation Methodology
21
VI. Assumptions
26
IX. Valuation
35
40
44
46
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International, a Swiss entity. All rights reserved.
22
V. Valuation Methodology
DCF
Discounted Cash Flow
This methodology estimates the economic value (or the market value) of a
company by calculating the present value of projected cash flows, i.e. the
income and expenses (including investments needed for maintaining and
expanding the companys activities) that are predictable from the perspective
of perpetuity of the entity. These projections should take into consideration
the business plan established by the companys management, the prospects
of the sector in which the company operates and macroeconomic aspects.
The Discounted Cash Flow Methodology can be used to value any type of
company provided it has a business plan that is consistent and feasible. This
methodology is recommended for companies that have reasonable prospects
for significant expansion of their activities and whose business plan may be
considered appropriate for achieving this growth, since the methodology is
based on future cash flows.
This methodology reflects the value of the intangible assets, such as brand
name, client portfolio, product portfolio, among others, as all these assets
have an effect on the companys capacity to generate results.
The Free Cash Flow to the Firm aims to evaluate the company as a
whole, that includes, beyond the stockholding, the participation of others
holders of rights in the company (holders of bonds, shareholders, etc).
The Free Cash Flow to the Firm can be represented by the following
formula:
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23
V. Valuation Methodology
DCF
Discounted Cash Flows Method (DCF)
Historical
Income Statement
Assumptions
Discount Rate
Discounted Free Cash Flow
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24
V. Valuation Methodology
Discount rate
Establishing the discount rate is a fundamental stage of the economic valuation. This single factor reflects aspects of a subjective nature, varying from one
investor to another, such as opportunity cost and individual perception of investment risk.
WACC (Weighted Average Cost of Capital)
The cost of capital for the Company was calculated using the WACC
methodology. WACC takes into consideration various financing components,
including debt, cost of equity and hybrid bonds used by companies to finance
its cash needs. It is calculated according to the following formula:
D
E
t
Kd
Ke
=
=
=
=
=
The cost of equity for the Company was calculated using the CAPM
methodology. Using the CAPM methodology, the cost of equity is
calculated according to the following formula:
D/(D+E)
Rf (1+Ia) x (1+Ibr)
Kd * (1-t)
* (E[Rm] - Rf)
E/(D+E)
CRP
Ke
Rs
=
E/(D+E)*Ke+(D/(D+E)*Kd = WACC
Weighted Average Cost of Capital
Total debt
Total equity
Tax rate
Cost of debt
Cost of equity
[(1+Rf)/(1+Ia)*(1+Ibr)-1] +(*Rm)+CRP+Rs = Ke
Cost of Equity
Rf
E[Rm]
E[Rm] - Rf
CRP
Rs
Ia
Ibr
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International, a Swiss entity. All rights reserved.
=
=
=
=
=
=
=
=
25
V. Valuation Methodology
The risk-free rate is derived with reference to the 2 year average bond yield
on the United States 30 year treasury bond (T-Bond) rate between January
1st, 2013 and December 31st, 2014 or approximately 3.4%. (Source:
Bloomberg, historical data)
The build up of the cost of equity to this point has been based on
the United States equity and bond markets. As such a CRP is
considered a necessary component in the cost of equity to
incorporate additional risk associated with investing in the country,
which is typically not reflected in the cash flows.
To estimate the long term stock market risk premium (E[Rm] Rf), we relied
upon the average return above the Treasury Bond rate provided by investing
in the U.S. stock market, which was 4.6% (source: Aswath Damodaran
website).
Beta
Size premium
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26
Contents
Glossary
I. Executive Summary
11
14
17
V. Valuation Methodology
21
VI. Assumptions
26
IX. Valuation
35
40
44
46
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International, a Swiss entity. All rights reserved.
27
Assumptions
Introduction
The Parnaba Complex is an energy park that, given the proximity between
the gas fields (upstream) and TPPs (downstream), is founded on an
integrated model.
Downstream
MA
Upstream
Overview of Downstream
Parnaba I
675
Parnaba II
517
Parnaba III
178
Parnaba IV
56
Total
1426
28
Assumptions
Introduction (cont.)
In order to fulfill electricity generation obligations, the TPPs must have a trustworthy source of fuel.
The initial source of gas, which is contractually guaranteed until 2027 for Parnaba III, and 2028 for Parnaba IV, will be provided by the Consortium.
The proximity between the gas fields, gas treatment units, and thermal power plants integrate the Downstream and Upstream businesses, as presented bellow:
29
Assumptions
Introduction (cont.)
37.7
70
70.0
Morada Nova
BCM
Tianguar
60
Esperantinpolis
Baslios
50
Havana
Axixa
40
23.9
32.3
Angical
GVR
30
GVB
SE BJ
Isabel
20
Chicote
Alencar
Raimundo
10
6.1
1.9
0.4
8.4
Sossgo
Vitria
Source: BTG
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30
Assumptions
BPMB
Revenues
The results presented below represent 30% of the total revenues that the Consortium generates.
Gas contracts revenues: Based on the gas demand from the 4 TPPs, these revenues match the fuel purchase costs of the downstream business.
Fixed revenues: The TPP has an agreement with the gas producers to pay a fixed-lease, which is contractually determined by the parties.
Variable revenues: The variable-lease revenues, which derive exclusively from Parnaba I and III, were calculated based on the difference between: (i) total
revenues and; (ii) fixed revenues; (iii) variable costs; and (iv) taxes, regulatory fees and insurance.
Condensate gas: It is a low-density liquid present in gas fields. This revenue line was projected by multiplying volume in million Boe (barrel of oil equivalent) and
the condensate price in million reais. It represents an average of 0.5% of the total revenue up until the end of the contracts with the TPPs.
BPMB Gross revenue projection
600
511
484
500
462
R$ MM
440
422
417
395
400
339
316
300
261
76
200
64
64
1
301
74
57
68
2
60
2
100
60
47
75
71
2
187
123
270
319
196
149
167
80
2
177
336
64
84
2
187
83
67
89
2
197
67
79
71
93
2
208
71
75
99
2
219
104
2
231
110
2
244
116
1
258
83
79
75
88
374
355
459
435
104
2
248
110
1
253
116
1
267
122
1
282
129
1
297
134
0
1
142
0
1
148
0
133
140
148
52
0
52
0
0
0
0
0
0
0
0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040
Source: BTG
Gas contract
Condensate
Fixed rental
Variable rental
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31
Assumptions
BPMB
Deductions
The results presented below represent 30% of the Consortiums deductions.
Deduction taxes: Deductions on gross revenues comprise PIS and Cofins at rates of 1.65% and 7.60% respectively, and ICMS (which is exclusively on gas
sales) at a 4.6% rate. Additionally, it was considered PIS and Cofins credit of 1.65% + 7.60% on 50% over Opex, abandonment costs, exploration expenses and
depreciation.
Special participations: A progressive tax applied on the gas production exceeding 450 thousand cubic meters of BOE from each well.
ANEEL fees: Calculated according to current contract assumptions, annually adjusted by the Brazilian inflation-index IPCA.
Royalties: It was projected as 10.0% of the total gross revenues throughout the entire projection period.
Costs
The results presented below represent 30% of the Consortiums Opex and other costs
Opex: Based on the 2015 budget and production projection adjusted by the Brazilian inflation-index IPCA. It is worth noticing the depletion of the wells from 2032
up to 2036.
Landowner share: According to Brazilian law, the landowner must receive 1.0% of the total revenue.
Easement Agreement: Pipelines have several kilometers of length, and pass over farms and lands owne d by third parties. In this contract, the owners of such
lands grant a right of access and easement to the construction, maintenance and removal of the pipeline. In exchange for such services, the Consortium must pay
an insurance and an indexed amount, which is paid periodically.
Abandonment costs: As per regulation requirements, once the gas well is depleted, the company must remove the equipment, plug the well and remediate the
surface so as to prevent the leakage of hydrocarbons and any damage to the environment in the surrounding area. BTGs management considered an
assumption of R$ 1.5 million per well. The abandonment costs were more substantial in 2040, given that the wells will be closed at the same year.
R$ MM
68
35
20
2015
Source: BTG
22
31
33
37
43
38
40
42
44
51
52
49
54
57
60
30
24
29
30
11
2016
2017
2018
Opex
2019
2020
2021
2022
2023
Landowner share
2024
2025
2026
2027
2028
2029
2030
Easement agreement
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2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
32
Assumptions
BPMB
Expenses
The results presented below represent 30% of the Consortiums expenses.
Rental to ANP: Calculated according to current contract assumptions, adjusted by the Brazilian inflation-index IPCA.
SG&A Consortium: Composed by three factors: production, development & infrastructure and exploration. It is important to mention that, in 2019, the end of
exploration of new gas fields causes a reduction in SG&A.
SG&A BPMB: According to the Client Management, it comprises expenses with Back Office, accounting among others. Also according to BPMB, it decreases
with the improving integration between the plants.
Exploration expenses: Projected as a combination of expenses from exploration, drilling and other finding expenditures (Seismic, injection wells, among others).
82
77
40
35
R$ MM
19
16
30
25
20
58
46
0
1
39
0
1
30
0
1
15
10
19
20
21
22
28
0
1
27
0
1
29
0
1
30
0
1
32
0
1
11
12
12
17
12
11
10
34
0
1
13
35
0
1
14
37
0
1
32
0
1
23
0
1
14
Source: BTG
2015
2016
2017
2018
2019
2020
2021
Rental to ANP
2022
2023
2024
2025
2026
2027
P&D
25
0
1
15
SG&A Consortium
2028
19
0
1
11
11
12
2029
2030
2031
2032
2033
5
1
0
25
0
1
SG&A BPMB
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15
0
13
0
11
0
0
0
0
0
0
0
0
0
2034
2035
2036
2037
2038
2039
2040
Exploration expenses
33
Assumptions
BPMB
Depreciation
The results presented below represent 30% of the Consortiums depreciation
Total depreciation of the infrastructure was projected at 20 years (at a 5% p.a. rate).
The depreciation rate of property, plant and equipment was projected based on the yearly production and proved developed reserves.
Capex
The results presented below represent 30% of the Consortiums Capex
Major capital expenditures has been projected as investments in development, and in the infrastructure that is built in order to connect the pipeline.
R$ MM
203
200
150
97
100
143
0
84
95
0
63
80
50
80
0
51
43
0
18
39
0
18
29
0
26
0
22
0
0
0
0
0
0
0
2018
2019
2020
2021
2022
2023
42
14
21
0
2015
Source: BTG
17
18
2016
2017
Drilling
Development
37
0
14
39
0
14
37
0
14
38
0
14
0
0
24
0
25
0
23
0
25
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
Infrastructure
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34
Assumptions
BPMB
Income taxes
BPMB is taxed with income taxes and social contribution rates at 25% and 9% respectively. It is worth mentioning, however, that BPMB has the following fiscal
benefit :
Working capital
The table presents the average of days and drivers for each account.
BPMB
Current assets
Accounts receivable
Taxes receivable
Days
45
3
Driver
Days of revenues
Days of revenues
Current liabilities
Tax payables
Accounts payable
Other accounts payable
Days
30
30
2
Driver
Days of costs and capex
Days of deductions
Days of costs
Source: BTG
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International, a Swiss entity. All rights reserved.
35
Contents
Glossary
I. Executive Summary
11
14
17
V. Valuation Methodology
21
VI. Assumptions
26
IX. Valuation
35
40
44
46
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
36
Valuation
BPMB
Income Statement
2015
261.09
(36.60)
224.50
(19.88)
204.62
(41.69)
162.93
72.58%
(64.37)
98.56
(25.04)
-25.41%
73.52
2016
316.39
(58.68)
257.72
(22.47)
235.24
(38.45)
196.79
76.36%
(61.81)
134.98
(31.25)
-23.15%
103.73
2017
339.03
(60.09)
278.94
(23.91)
255.03
(29.17)
225.86
80.97%
(57.94)
167.92
(39.32)
-23.42%
128.60
2018
269.58
(45.97)
223.61
(35.05)
188.56
(22.82)
165.73
74.12%
(48.59)
117.14
(27.97)
-23.88%
89.17
2019
301.41
(52.41)
249.00
(31.22)
217.78
(19.73)
198.05
79.54%
(46.45)
151.60
(36.12)
-23.83%
115.48
2020
318.51
(56.18)
262.33
(32.74)
229.59
(14.99)
214.60
81.80%
(44.82)
169.78
(40.47)
-23.84%
129.31
2032
510.52
(101.41)
409.11
(60.21)
348.90
(12.95)
335.96
82.12%
(35.21)
300.75
(102.25)
-34.00%
198.49
2033
134.07
(41.91)
92.16
(29.88)
62.28
(9.48)
52.79
57.29%
(15.37)
37.42
(12.72)
-34.00%
24.70
2021
336.10
(59.65)
276.45
(36.91)
239.54
(14.17)
225.37
81.52%
(41.10)
184.26
(43.92)
-23.84%
140.34
2022
354.67
(70.17)
284.50
(43.08)
241.42
(13.55)
227.87
80.09%
(41.14)
186.73
(44.50)
-23.83%
142.22
2023
374.24
(77.65)
296.59
(38.02)
258.58
(14.30)
244.28
82.36%
(41.18)
203.10
(48.40)
-23.83%
154.70
2024
394.89
(83.23)
311.67
(40.05)
271.61
(15.09)
256.53
82.31%
(41.21)
215.32
(73.21)
-34.00%
142.11
2025
416.68
(87.76)
328.91
(42.20)
286.71
(15.92)
270.80
82.33%
(45.39)
225.40
(76.64)
-34.00%
148.77
2026
439.56
(91.74)
347.82
(44.47)
303.36
(16.79)
286.57
82.39%
(44.10)
242.47
(82.44)
-34.00%
160.03
2027
462.05
(92.87)
369.18
(51.42)
317.75
(17.71)
300.04
81.27%
(42.86)
257.18
(87.44)
-34.00%
169.74
2028
421.73
(85.07)
336.66
(49.09)
287.57
(18.40)
269.17
79.95%
(39.69)
229.48
(78.02)
-34.00%
151.45
2029
434.67
(86.08)
348.59
(51.57)
297.02
(16.26)
280.76
80.54%
(35.19)
245.58
(83.50)
-34.00%
162.08
2030
458.54
(90.91)
367.63
(54.35)
313.28
(11.63)
301.65
82.05%
(35.19)
266.45
(90.59)
-34.00%
175.86
2031
483.82
(96.02)
387.80
(57.29)
330.51
(12.27)
318.24
82.06%
(35.20)
283.04
(96.23)
-34.00%
186.81
2034
141.55
(44.46)
97.09
(28.84)
68.24
(7.50)
60.74
62.56%
(14.16)
46.58
(15.84)
-34.00%
30.74
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International, a Swiss entity. All rights reserved.
2035
148.23
(46.88)
101.35
(30.39)
70.96
(6.41)
64.55
63.69%
(13.40)
51.15
(17.39)
-34.00%
33.76
2036
52.16
(23.80)
28.36
(11.20)
17.16
(5.86)
11.30
39.84%
(4.47)
6.83
(2.32)
-34.00%
4.51
2037
N.a.
N.a.
-
2038
N.a.
N.a.
-
2039
2040
3.14
3.14
(67.79)
(64.65)
(64.65)
N.a. -2062.16%
(64.65)
N.a.
0.00%
(64.65)
37
Valuation
BPMB
Cash Flow
2015
73.52
64.37
11.38
(203.03)
(53.76)
2016
103.73
61.81
(2.31)
(142.74)
20.49
2017
128.60
57.94
(3.17)
(94.64)
88.73
2018
89.17
48.59
5.39
(80.05)
63.10
2019
115.48
46.45
(2.88)
(43.48)
115.57
2020
129.31
44.82
(1.42)
(39.50)
133.21
2021
140.34
41.10
(1.02)
180.43
2022
142.22
41.14
1.00
184.36
2023
154.70
41.18
(0.80)
195.08
2024
142.11
41.21
(0.87)
182.45
2025
148.77
45.39
(1.29)
(37.33)
155.53
2026
160.03
44.10
(1.58)
(38.63)
163.92
2027
169.74
42.86
(1.92)
(37.16)
173.52
0.15
0.50
(50.10)
0.15
1.50
16.58
0.15
2.50
62.37
0.15
3.50
38.52
0.15
4.50
61.27
0.15
5.50
61.34
0.15
6.50
72.15
0.15
7.50
64.03
0.15
8.50
58.84
0.15
9.50
50.05
0.15
10.50
37.24
0.15
11.50
34.25
0.15
12.50
31.64
2028
151.45
39.69
2.87
(38.45)
155.57
2029
162.08
35.19
(1.36)
195.91
2030
175.86
35.19
(1.88)
209.17
2031
186.81
35.20
(1.53)
220.47
2032
198.49
35.21
(1.64)
232.07
2033
24.70
15.37
29.04
69.11
2034
30.74
14.16
(0.48)
44.42
2035
33.76
13.40
(0.13)
47.02
2036
4.51
4.47
4.29
13.27
2037
(1.32)
(1.32)
0.15
13.50
24.76
0.15
14.50
27.21
0.15
15.50
25.35
0.15
16.50
23.32
0.15
17.50
21.42
0.15
18.50
5.57
0.15
19.50
3.12
0.15
20.50
2.89
0.15
21.50
0.71
0.15
22.50
(0.06)
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International, a Swiss entity. All rights reserved.
2038
-
0.15
23.50
-
2039
-
0.15
24.50
-
2040
(64.65)
4.78
(59.87)
0.15
25.50
(1.86)
38
Valuation
BPMB
Valuation
670.59
17.58
21.23
(6.71)
Deferred taxes
Equity value
3.06
688.17
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International, a Swiss entity. All rights reserved.
39
Valuation
Conclusion
Conclusion
Based on the scope of our report, and subject to the assumptions, restrictions, and limitations described herein, we have estimated the fair value of BPMB as
at December 31, 2014, as presented below.
BPMB
688.17
17.58
R$ MM
670.59
Bottom (-5%)
Equity value
655.48
Central
688.17
Upper (+5%)
720.86
Adjustments
BPMB Equity
value
The valuation of BTGs stake in BPMBs valuation (100%) as at December 31, 2014 ranges from R$ 655.5 million to R$ 720.9 million.
The valuation methodology applied in order to determined the value of BPMB was the discounted cash flow method (presented on pages 37 to 39).
In providing its services, KPMG relied on information provided by the Clients and BTGs Management and discussions with your employees or other
representatives, and KPMG is not responsible for independently verifying any information publicly available or supplied to it in the preparation of this report.
KPMG does not express an opinion on the reliability of the information presented above, and determines that any errors, changes or modifications of such
information could significantly affect the findings of KPMG. Based on the terms of our proposal, data processing and information does not imply acceptance or
certification of these as true by KPMG.
During the course of our work, KPMG performed testing procedures as needed. However, we emphasize that our evaluation work did not constitute an audit of
financial statements or other information submitted to us by the Clients and BTGs Management and should not be treated as such.
Neither KPMG nor the Clients or BTGs Management can ensure that future results will meet projected results, due to unforeseen external or internal factors.
We emphasize that a full understanding of this report and its conclusion is only possible through its complete reading. Thus, one should not draw conclusions by
reading just part of it.
It is imperative to point out that this version of the valuation report is a free translation from Portuguese to English; therefore, in case of discrepancies between the report in
Portuguese sent on April 13, 2015 and the free translation report, the former shall prevail in all matters.
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
40
Contents
Glossary
I. Executive Summary
11
14
17
V. Valuation Methodology
21
VI. Assumptions
26
IX. Valuation
35
40
44
46
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International, a Swiss entity. All rights reserved.
41
Appendix I
Curricula vitae
Name
Position
Sector of expertise
Name
Position
Qualifications
Experience
Throughout 15 years of experience, he has participated in a wide range of activities, including: financial advisory to clients in
mergers and acquisitions, privatizations and offerings.
Before joining KPMG Brazil he worked at Acar Guarani (one of the largest Sugar and Ethanol Company in Brazil) and was the
CFO at Cimentos Liz (one the largest cement group in Brazil).
Sector of experience
Electricity, Oil and Gas, Sugar and Alcohol. Agriculture, Financial Sevices and Consumer Goods
Qualifications
Experience
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International, a Swiss entity. All rights reserved.
42
Appendix I (cont.)
Curricula vitae
Name
Position
Augusto Sales
Sector of expertise
Name
Rben Palminha
Position
Qualifications
Postgraduate degree in Finance, with specialization in Corporate Finance INDEG-IUL, (Lisbon, Portugal)
Specialization in Finance INDEG-IUL (Lisbon, Portugal)
Graduate in Finance ISCTE-IUL (Lisbon, Portugal)
Experience
He joined KPMG Corporate Finance in 2006. Since then, Rben has participated in Energy and Infrastructure projects in various
countries, assisting Public and Private entities, accumulating skills in Project Finance, PPP Projects, M&A and Valuations.
Qualifications
Experience
Sector of experience
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International, a Swiss entity. All rights reserved.
43
Appendix I (cont.)
Curricula vitae
Name
Position
Qualifications
Experience
Has more than 7 years of experience in KPMG, ample experience in M&A services, and preparation of business plans and
valuations. In addition, Fabiano has developed several financial models and evaluated various intangible assets within Purchase
Price Allocation exercises.
Sector of experience
Banking, real estate, power, agribusiness, foods and beverages, retail and logistic.
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International, a Swiss entity. All rights reserved.
44
Contents
Glossary
I. Executive Summary
11
14
17
V. Valuation Methodology
21
VI. Assumptions
26
IX. Valuation
35
40
44
46
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International, a Swiss entity. All rights reserved.
45
Appendix II
Balance Sheet | BPMB
31/12/2013
31/12/2014
1.53
35.41
0.04
21.23
47.25
0.91
2.62
11.27
4.99
369.22
7.44
429.91
3.06
386.53
6.25
467.85
R$ MM
Liabilities
Current
Accounts payable
Tax payables
Dividends payable
Other accounts payable
Non-current
Provision for abandonment of installation
Shareholders' equity
Equity
Capital reserve
Legal reserve
Profit reserve
Accumulated profits
Total liabilities and shareholders' equity
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
31/12/2013
31/12/2014
70.49
17.04
2.15
0.01
11.80
8.05
6.71
1.65
18.20
25.04
315.12
0.45
6.44
429.91
315.62
49.50
3.67
45.81
467.85
46
Contents
Glossary
I. Executive Summary
11
14
17
V. Valuation Methodology
21
VI. Assumptions
26
IX. Valuation
35
40
44
46
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International, a Swiss entity. All rights reserved.
47
Appendix IV
Discount rate
BPMB
Discount rate
Source:
(a) Risk free rate Bloomberg
During Sudene
After Sudene
(a)
3.4%
3.4%
(b)
2.0%
2.0%
(c)
5.5%
5.5%
(d) = (1 + a) / (1 + b) * (1 + c) -1
6.9%
6.9%
(e)
4.6%
4.6%
(f)
0.98
0.98
D/E
(g)
42.9%
42.9%
(h)
23.9%
34.0%
(i) = f * {1 + [g * (1 - h)]}
1.31
1.26
RF Adjusted
Releverage beta
(j)
2.18%
2.18%
Size premium
(k)
1.98%
1.98%
Re = d + (e * i) + j + k
17.1%
16.9%
% Equity
(L)
70.0%
70.0%
% Debt
(m)
30.0%
30.0%
(n)
13.9%
13.9%
(h)
23.9%
34.0%
(o) = n * (1 - h)
10.6%
9.2%
= Re * L + o * m
15.14%
14.58%
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48
Attachment III
E.ON Assets Valuation Report
CORPORATE FINANCE
ABCD
Phone
Fax
Internet
55 (21) 3515-9400
55 (21) 3515-9000
www.kpmg.com.br
Economic and financial valuation report of: Eneva Participaes S.A. in Judicial Recovery and Parnaba Gs Natural S.A.
Dear Sirs,
Under the terms of our proposal, dated April 9, 2015, for professional services and subsequent understandings, KPMG Corporate Finance Ltda. (KPMG) has
performed the economic and financial valuation of Eneva Participaes S.A. in Judicial Recovery (Eneva Participaes JR) and Parnaba Gs Natural S.A.
(PGN), at the base date of December 31st, 2014.
It is imperative to point out that this version of the valuation report is a free translation from Portuguese to English; therefore, in case of discrepancies between
the report in Portuguese sent on April 13, 2015 and the free translation report, the former shall prevail in all matters.
Yours Sincerely,
Augusto Sales
Partner
Important Notes
For the benefit of this report, Eneva S.A. in Judicial Recovery (Eneva JR or
Client), Eneva Participaes S.A. in Judicial Recovery (Eneva
Participaes JR) and Parnaba Gs Natural S.A. (PGN), altogether will be
referred to as Companies.
On February 12th, 2015, Eneva and Eneva Participaes filed a Plan for
Judicial Recovery (JRP), in accordance with Article 53 of the Brazilian
Judicial Recovery Law. Within this context, Eneva JR seeks to initiate a
capital increase. Such potential capital increase envisages a change in Eneva
JRs shareholding structure, and, in case the JRP obtains full approval for
execution, such mutations in shareholding structure are planned to be made
through the following contributions: (i) cash; (ii) credit capitalization; (iii) and
asset subscription.
This report has been elaborated by KPMG, as per Eneva JRs Board of
Directors requisition, as a support for the Transaction. The report, according
to the JRP, will be presented to Eneva JRs Creditor Committee. In case of
approval, the report will be presented to the Extraordinary General
Shareholders meeting.
This report may not be circulated, copied, published or, by any matters,
utilized, nor may it be archived, partly or integrally, without KPMGs previous
consent. As this report will be used in the analysis of a potential capital
increase transaction (Transaction) involving Eneva JR, which is a Brazilian
company listed with the So Paulo Stock Exchange (Bovespa), as well as
subject to the reporting requirements of the Brazilian Stock Exchange
Commission (CVM), the Client may give access to the report to CVM only to
the extent required by law and shall remain fully responsible for any damage
or injury resulting or arising from such access, which may be experienced by
Eneva, KPMG, including representatives of KPMG, or any third party.
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
Important Notes
The preparation of this report was based on our reliance, with the express
approval of the Client, on the accuracy, content, veracity, completeness,
sufficiency and integrity of the data provided to or discussed with KPMG. Thus,
KPMG has not inspected any asset, or prepared or obtained an independent
valuation of the Clients assets, liabilities, or its solvency. Therefore, the Client,
including its Management, takes responsibility for all information provided to or
discussed with KPMG.
It is imperative to point out that this version of the valuation report is a free
translation from Portuguese to English; therefore, in case of discrepancies
between the report in Portuguese sent on April 13, 2015 and the free
translation report, the former shall prevail in all matters.
All estimates and projections herein presented have been provided by the
Information Providers; when necessary, such estimates and projections have
been adjusted by KPMG, according to its own judgment on their reasonability,
and are assumed to be underpinned by the Information Providers
managements best evaluation of the Companies and respective markets
best perspectives.
KPMG based its work on the information provided by the Information Providers
and/or other representatives of such Information Providers. Therefore, the
Client, including its Management, takes responsibility for all information
provided to or discussed with KPMG.
KPMG has not verified independently the information provided by the Client,
so, it cannot confirm the precision, accuracy and sufficiency of such
information and, therefore, the Client assumes all responsibility for the
information provided to KPMG.
Any changes in the information provided by the Client and E.ON to KPMG may
impact the results of this report. KPMG assumes no responsibility for updating,
reviewing or amending this report, as a result of the disclosure of any
information subsequent to the date of the issuance of this report.
During the course of our work, we carried out analysis procedures whenever
necessary. However, we emphasize that our work did not constitute an audit of
the financial statements or of any other information provided by the Client or
E.ON and should not be interpreted as such. Our work took into consideration
the relevance of each item, therefore, less relevant assets and liabilities were
not analyzed in detail.
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International, a Swiss entity. All rights reserved.
Important Notes
The sum of the individual values herein presented may diverge from the
sums presented in this report, due to rounding issues.
Our valuation was made on the basis of events which can be reasonably
expected, and therefore does not take into account extraordinary and
unforeseeable events (new industry regulations, changes in tax laws, natural
catastrophes, major social and political events, nationalization etc.), which
may cause adverse effects on the Companies.
This report is not to be used as a sole basis for the evaluation of the
Companies, for the report does not contain all necessary information for such
use. Therefore, this report is not to be interpreted as a proposal, solicitation,
suggestion, nor recommendation by KPMG for the Transaction. Any decision
taken by the Companies shareholders shall be assumed integrally by the
same shareholders. KPMG will not take any responsibility as to the
Companies shareholders decisions.
We emphasize that a valuation establishes a theoretical estimate within an
interaction involving a buyer and a seller, where both are intended to close a
deal, with the necessary access to all relevant information, and assuming that
neither parties have the immediate necessity to buy or sell. An effective
negotiation does not necessarily reflect such conditions, and may include
other elements; consequently, the estimated value need not be used in the
effective transaction.
This report does not envisage the satisfaction of any personal nor specific
interests. Thus, results from other evaluations, elaborated by third parties, may
diverge from our results. Notwithstanding, such divergence should not be
regarded as an inherent deficiency of the realized work.
The scope of our engagement did not include the detection of fraud in the
Companies operations, processes, records or documents.
The services performed herein may have been based on legal and
administrative rules. In this regard, we note that our legislation is complex and
often the same provision can be interpreted in multiple ways. KPMG always
seeks to be up-to-date on the various interpretative tendencies, in order to
permit a broad assessment of the alternatives and risks involved. Even so,
there may be some interpretations of the law that differ from ours. Under these
circumstances, neither KPMG, nor any other firm, can provide total assurance
that the Company will not be questioned by third parties or government
authorities.
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International, a Swiss entity. All rights reserved.
Contents
Glossary
I. Executive Summary
13
16
23
V. Valuation Methodology
27
VI. Assumptions
32
IX. Valuation
49
63
67
70
72
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International, a Swiss entity. All rights reserved.
Contents
ACL
ACR
ANEEL
ANP
BACEN or BCB
BCM
BMI
BM&F
BOVESPA
CAGR
CAPM
CCEAL
CCEAR
CCEE
COFINS
CoGS
CRP
CVM
CVU
D&A
DCF
EBIT
EBITDA
EBT
EIA
EIU
EMBI
EPE
ERP
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International, a Swiss entity. All rights reserved.
Contents
E&P
GDP
GVB
GVR
GW
Giga Watt
IBGE
IFRS
INEA
IPCA
IRPJ
ITS
JRP
KPMG
LNG
MBA
MMBtu
MW
Mega Watt
MWh
M&A
NOPAT
NPV
ONS
Opex
Operational Expenses
O&M
PE
Private Equity
PIS
PLD
PPA
PPP
Public-Private Partnership
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International, a Swiss entity. All rights reserved.
Contents
RGR
R$
Brazilian Real
R&D
RF
Risk Free
SE
Shareholders Equity
SELIC
SG&A
SPE
SUDENE
TPP or UTE
TCF
WACC
WC
Working Capital
BNDESPAR
BPMB
BTG
Cambuhy
Cambuhy Investimentos
Eneva JR
Eneva Participaes JR
E.ON
E.ON S.E.
PGN
OGX
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International, a Swiss entity. All rights reserved.
Contents
Glossary
I. Executive Summary
13
16
23
V. Valuation Methodology
27
VI. Assumptions
32
IX. Valuation
49
63
67
70
72
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
I. Executive Summary
Introduction
On February 12th, 2015, Eneva and Eneva Participaes filed a Plan for
Judicial Recovery (JRP), in accordance with Article 53 of the Brazilian
Judicial Recovery Law. Within this context, Eneva JR seeks to initiate a
capital increase transaction. Such transaction envisages a change in
Eneva JRs shareholder structure, and, should the JRP obtain full approval
for execution, such mutations in shareholder structure are planned to be
made through the following contributions: (i) cash; (ii) credits capitalization;
(iii) and assets subscription.
Given the above mentioned context and background, the objective of our
work, in accordance with the Clients request was to perform a valuation of
PGN and Eneva Participaes, in order to underpin the possible asset
subscription.
Basis of information
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International, a Swiss entity. All rights reserved.
10
Our work was based on the equity position and information obtained
prior to the date of issuance of this report.
It is important to point out that KPMG will not update this report after
the date of issuance.
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International, a Swiss entity. All rights reserved.
11
I. Executive Summary
Summary of Results
Based on the scope of our report, and subject to the assumptions, restrictions, and limitations described herein, we have estimated the fair value of Eneva
Participaes JR and PGN as at December 31, 2014, as presented below.
Eneva Participaes S.A. in Judicial Recovery
Equity Value
per share
(R$)
1.13
Equity Value
100%
(R$ MM)
302.15
E.ONs stake
(50.0%)
(R$MM)
151.07
-
PGN
1.25
Equity Value
per share
(R$)
1.46
317.26
332.36
Equity Value
100%
(R$ MM)
984.96
158.63
166.18
+
E.ONs stake
(9.09%)
(R$MM)
1.19
89.53
-
1.53
1.60
1,034.08
1,083.20
94.00
98.46
+
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
12
Contents
Glossary
I. Executive Summary
13
16
23
V. Valuation Methodology
27
VI. Assumptions
32
IX. Valuation
49
63
67
70
72
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International, a Swiss entity. All rights reserved.
13
firms that provide Audit, Tax and Advisory services. KPMG International
provides no services. However, its member firms perform Audit, Tax and
Advisory practices (through the Audit departments, Tax and Advisory,
respectively). Together, KPMG International's member firms have more than
155 thousand employees across the world, and is present in 155 countries.
KPMG brand was created in 1987 from the merge of Peat Marwick
The approval of the report occurred only after it was reviewed by the
There are no commercial and credit relations that could impact the
Report;
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International, a Swiss entity. All rights reserved.
14
Enel
State Grid
Mitsui & Co
2014
2014
2014
2014
2014
Dresser Rend
Equatorial Energia
Iberdrola
2013
2013
Vicel
2014
2014
SN Power
Brasympe
2013
2013
2013
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International, a Swiss entity. All rights reserved.
2013
15
Contents
Glossary
I. Executive Summary
13
16
23
V. Valuation Methodology
27
VI. Assumptions
32
IX. Valuation
49
63
67
70
72
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International, a Swiss entity. All rights reserved.
16
2007
2008
Lauching of the fundamental
stone marks the inicial phase
of construction and mounting
of one of the leading projects
of Eneva's portfolio.
2010
2012
2013
2014
2015
Operational Information
Eneva JR has a portfolio of gas fueled power plants, and has an array of
Eneva initiates its judicial recovery process on December 9th, 2014. The judicial recovery
process is a consequence, among other factors, of (i) not renewing the agreement to
suspend the amortization and payment of interest of financial transactions contracted by
Eneva and certain subsidiaries with its financial creditors, expired on November 21st, 2014;
and (ii) not having reached an agreement with the financial institutions involved in the
implementation of Enevas stabilization plan aimed at strengthening the capital structure
and measures for the re-profiling of Enevas financial debt.
31/12/2014
499.14
(553.21)
(54.07)
(10.31)
(64.38)
(19.28)
(83.66)
21.24
(62.42)
(146.07)
Source: Eneva JR
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17
ENEVA
PARTICIPAES
S.A.
50%
50%
4
Seival
Participaes
S.A.
6
Au II Gerao
de Energia S.A.
7
UTE Porto
do Au
Energia S.A.
50%
50%
50%
8
MPX Chile
Holding
Ltda.
9
Parnaba
Participaes
S.A.
100%
100%
50%
10
Sul Gerao de
Energia Ltda..
11
ENEVA
Comerc. de
Combustveis
Ltda.
100%
12
ENEVA Solar
Empreendimentos Ltda.
13
Au III Gerao
de Energia
Ltda.
100%
Seival
Gerao de
Energia
Ltda.
70%
70%
70%
Parnaba III
Gerao de
Energia S.A.
Parnaba IV
Gerao de
Energia S.A.
Parnaba
Gerao e
Comerc. de
Energia S.A.
100%
14
Tau Gerao
De Energia
Ltda.
Source: Eneva JR
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100%
100%
15
ENEVA
Comerc. de
Energia Ltda..
16
SPEs Ventos*
18
Parnaba
Comercializadora
Kinross Mining
95%
5%
Parnaba III
Parnaba IV
Concession agreement
CCEAR N
7179/08
N/A ( 1)
176
56
101.8
52
98
49
2028 (1)
(1) - Parnaba IV is a "Free Market" power plant, which operates under an
authorization agreement. It obtained a license/authorization to operate and sell
energy in bilateral agreements.
Concession/authorization expiry
2027
CCEAL
Agreements
100%
Parnaba IVs
generated energy
Parnaba Comercializadora is a break-even company, therefore does
not generate material profits nor losses.
Source: Eneva JR
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19
Description
Equity Value at
100% (R$ MM)
Company
5
Seival Gerao de Energia Ltda.
6
Au II Gerao de Energia S.A.
7
UTE Porto do Au Energia S.A.
8
MPX Chile Holding Ltda.
10
Sul Gerao de Energia Ltda.
ENEVA Comercializadora de
Combustveis Ltda.
Equity Value at
100% (R$ MM)
13
4
Seival Participaes S.A.
Description
39.49
2.52
14
4.67
ENEVA Comercializadora de
Energia S.A.
44.00
SPE Ventos
0.22
13.15
(0.04)
8.42
19.54
15
1.47
11
12
Source: Eneva JR
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20
PGN
Consortiums information
The upstream consortium in the Parnaba Basin (Consortium) currently
operates 3 gas fields and 7 exploration blocks with a total approximate area
of 21 thousand square kilometers in the Maranho State.
Below is presented a simplified diagram of the Consortiums current
operation.
PGN owns a 70% stake in the Consortium that holds the concessions of 7
blocks in the Parnaba Basin (21,000 km).
Current production from GVR field: c. 5.6 million m3/day.
The Consortium estimates reserves of more than 1 TCF (around 32.3
party geological studies were hired and results are expected for the 2nd
half of 2015.
The blocks operated by Parnaba Gs Natural (former OGX Maranho)
E.ON
Eneva JR
Cambuhy
Investimentos
BTG Patcual
18%
9%
73%
BPMB
PGN
Integrated project concept Gas to wire
UTE I (675MW), UTE III (178 MW) and UTE IV (56MW) are already in
operation. UTE II (517 MW) will be concluded in 2018; however, the PPA
will start only in 2016 because of the waiver granted by ANEEL.
Source: E.ON
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100%
70%
30%
Consortium
21
PGN
In 2015, the company will conduct an onshore drilling campaign in Brazil.
Discovered wells and new production wells will be drilled, which could allow
PGN to increase production capacity by 70%, by July, 2016, to 8.4 million
cubic meters per day.
31/12/2013
323.71
(118.84)
204.88
31/12/2014
581.98
(274.49)
307.49
(76.06)
(25.57)
(0.56)
(102.19)
102.69
(43.77)
(30.88)
(8.35)
(83.01)
224.48
24.83
(73.11)
(33.65)
(81.93)
20.76
(7.65)
(0.48)
12.64
55.73
(92.15)
(9.99)
(46.41)
178.07
(23.97)
(32.36)
121.74
22
Contents
Glossary
I. Executive Summary
13
16
23
V. Valuation Methodology
27
VI. Assumptions
32
IX. Valuation
49
63
67
70
72
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23
Macroeconomic trends
GDP expanded meagerly in 2014 and more recent data suggest that
inflation and foster GDP growth. In March 2013 annual interest rate was
7.25%, the lowest in Brazil's history. From then on, there have been nine
consecutive hikes, and annual interest rate has reached 12.75%.
2,71
2,76
2,79
2,86
2,96
3,06
2,36
1,76
According to the Brazilian Central Bank, the forecasted GDP variation for
1,94
2,14
1,67
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Projected
6,50
5,91
6,38
4,21
5,84 5,80
4,13
3,66
5,70
4,50
4,70
4,79
2018
2019
2020
3,10
2,50
2,50
2,50
2,55
2010
2011
2012
2013
Projected
Projected
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: BCB (31/12/2014)
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2014
2015
2016
2017
24
Sources of energy
77% of the electricity in Brazil comes from hydraulic plants, which are
Others
Nuclear6%
2%
Biomass
7%
Natural gas
8%
Distributors:
Electricity
generation
matrix
Hydraulic
77%
a)
b)
c)
d)
Source: EPE
available for all producers, as long as the grids are interconnected and as
long as the producers pay transmission fees.
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25
Production
Reserves
In the next years, oil production in Brazil was expected to grow, thanks to
4.5
4,5
4.0
4,0
3.5
3,5
3.0
3,0
2.5
2,5
2.0
2,0
1.5
1,5
1.0
1,0
0.5
0,5
0.0
0,0
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
4
3
2
Projected
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Projected
2012
Projected
180
160
140
120
100
80
60
40
20
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
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Projected
26
Contents
Glossary
I. Executive Summary
13
16
23
V. Valuation Methodology
27
VI. Assumptions
32
IX. Valuation
49
63
67
70
72
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27
V. Valuation Methodology
DCF
Discounted Cash Flow
This methodology estimates the economic value (or the market value) of a
company by calculating the present value of projected cash flows, i.e. the
income and expenses (including investments needed for maintaining and
expanding the companys activities) that are predictable from the perspective
of perpetuity of the entity. These projections should take into consideration
the business plan established by the companys management, the prospects
of the sector in which the company operates and macroeconomic aspects.
The Discounted Cash Flow Methodology can be used to value any type of
company provided it has a business plan that is consistent and feasible. This
methodology is recommended for companies that have reasonable prospects
for significant expansion of their activities and whose business plan may be
considered appropriate for achieving this growth, since the methodology is
based on future cash flows.
This methodology reflects the value of the intangible assets, such as brand
name, client portfolio, product portfolio, among others, as all these assets
have an effect on the companys capacity to generate results.
The Free Cash Flow to the Firm aims to evaluate the company as a
whole, that includes, beyond the stockholding, the participation of others
holders of rights in the company (holders of bonds, shareholders, etc).
The Free Cash Flow to the Firm can be represented by the following
formula:
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28
V. Valuation Methodology
Historical
Income Statement
Assumptions
Adjustments
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29
V. Valuation Methodology
Discount rate
Establishing the discount rate is a fundamental stage of the economic valuation. This single factor reflects aspects of a subjective nature, varying from one
investor to another, such as opportunity cost and individual perception of investment risk.
WACC (Weighted Average Cost of Capital)
The cost of capital for the Companies was calculated using the WACC
methodology. WACC takes into consideration various financing components,
including debt, cost of equity and hybrid bonds used by companies to finance
its cash needs. It is calculated according to the following formula:
The cost of equity for the Companies was calculated using the CAPM
methodology. Using the CAPM methodology, the cost of equity is
calculated according to the following formula:
Rf (1+Ia) x (1+Ibr)
+
D/(D+E)
* (E[Rm] - Rf)
Kd * (1-t)
CRP
E/(D+E)
Rs
+
D
E
t
Kd
Ke
=
=
=
=
=
Ke
=
E/(D+E)*Ke+(D/(D+E)*Kd = WACC
Weighted Average Cost of Capital
Total debt
Total equity
Tax rate
Cost of debt
Cost of equity
[(1+Rf)/(1+Ia)*(1+Ibr)-1] +(*Rm)+CRP+Rs+ = Ke
Cost of Equity
Rf
E[Rm]
E[Rm] - Rf
CRP
Rs
Ia
Ibr
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=
=
=
=
=
=
=
=
=
30
V. Valuation Methodology
The risk-free rate is derived with reference to the 2 year average bond yield
on the United States 30 year treasury bond (T-Bond) rate between January
1st, 2013 and December 31st, 2014 or approximately 3.4%. (Source:
Bloomberg, historical data)
The build up of the cost of equity to this point has been based on
the United States equity and bond markets. As such a CRP is
considered a necessary component in the cost of equity to
incorporate additional risk associated with investing in the country,
which is typically not reflected in the cash flows.
To estimate the long term stock market risk premium (E[Rm] Rf), we relied
upon the average return above the Treasury Bond rate provided by investing
in the U.S. stock market, which was 4.6% (source: Aswath Damodaran
website).
Beta
Size premium
To account for PGN and Enevas size, we have added 1.98% to the
cost of equity, this is the risk associated with Low Capitalization
companies, through studies done by Duff & Phelps (2014).
Alpha factor
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31
Contents
Glossary
I. Executive Summary
13
16
23
V. Valuation Methodology
27
VI. Assumptions
32
IX. Valuation
49
63
67
70
72
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International, a Swiss entity. All rights reserved.
32
Assumptions
Introduction
The Parnaba Complex is an energy park that, given the proximity between
the gas fields (upstream) and TPPs (downstream), is founded on an
integrated model.
Downstream
MA
Upstream
Overview of Downstream
Parnaba I
675
Parnaba II
517
Parnaba III
178
Parnaba IV
56
Total
1426
33
Assumptions
Introduction (cont.)
The initial source of gas, which is contractually guaranteed until 2027 for
Parnaba III, and 2028 for Parnaba IV, will be provided by the Consortium.
The proximity between the gas fields, gas treatment units, and thermal power
plants integrate the Downstream and Upstream businesses, as presented
bellow:
Source: Eneva JR
Albeit the fact that the gas supply agreements for Parnaba III and IV are
bound to expire in 2027 and 2028 respectively, Eneva JRs management
strongly supports the assumption that the TPPs will be able to extend the
concession period until 2042 and 2043 respectively.
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34
Assumptions
Introduction (cont.)
37.7
70
70.0
Morada Nova
BCM
Tianguar
60
Esperantinpolis
Baslios
50
Havana
Axixa
40
23.9
32.3
Angical
GVR
30
GVB
SE BJ
Isabel
20
Chicote
Alencar
Raimundo
10
6.1
1.9
0.4
8.4
Sossgo
Vitria
Source: E.ON
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35
Assumptions
Eneva Participaes Judicial Recovery: Parnaba III
Revenues
Fixed revenues (CCEAR Contract): Revenues from the energy generation capacity availability, as agreed in the CCEAR contracts signed in the 2008 A-5
Auction. The volumes were estimated based on the 98 Average MW capacity, as per the CCEAR contract, and the total number of hours of each year. The price
was projected based on the agreed prices in the A-5 Auction, and have been annually adjusted by the Brazilian Inflation-index IPCA.
It is important to point out that current CCEAR contracts are bound to expire in 2027, and that from 2028 onwards the applied assumption assumes a PPA
renewal under the same conditions as the one currently in place, with the rationale presented in page 34. In order to contemplate the risk associated to such
renovation, an alpha factor was included in the discount rate from 2027 onwards, as in page 73).
Variable revenues (CCEAR CVU): O&M reimbursements were calculated based on the expected net energy dispatch, provided by Eneva JRs management,
and the O&M agreed payment per dispatched megawatt-hour, which is specified in the CCEAR contract.
Please find below the revenue projection that has been used for Parnaba III
1,322 1,323
900
CCEAR Renewal
800
1.200
700
600
802
800
500
600
504
504
504
504
504
504
504
504
504
504
504
504
504
504
504
504
504
504
504
504
504
504
504
504
R$MM
GW/h
1.000
400
454
300
400
200
200
100
0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042
Source: Eneva JR
CCEAR Revenues
CCEAR CVU
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36
Assumptions
Eneva Participaes Judicial Recovery: Parnaba III
Deductions
Deduction taxes: Deductions on gross revenues comprise PIS and Cofins at rates of 1.65% and 7.60% respectively. Given that the TPP uses production factors
in order to deliver energy, the TPP has the right to claim PIS and Cofins credits.
Fixed costs
O&M fixed costs: Calculated according to current contract assumptions, and have been annually adjusted by Brazilian inflation-index IPCA.
ANEEL fees: Contractually agreed, within the CCEAR agreement, and is a fixed fee on the total installed capacity of the TPP, and was annually adjusted by
Brazilian inflation-index IPCA.
TUST: Contractually agreed, within the CCEAR agreement, and is a fixed tariff on the total installed capacity of the TPP, net of transmission losses, and was
annually adjusted by Brazilian inflation-index IPCA.
CCEE contribution: Fixed contribution on the total installed capacity of the TPP. It was annually adjusted by Brazilian inflation-index IPCA.
RGR over fixed revenues: As per regulation requirements, Parnaba III contributes 1.0% of its fixed revenues, net of deductions, to Eletrobras R&D fund, RGR.
Fixed-lease payment: The TPP has an agreement with the Consortium to pay a fixed-lease, which is contractually determined by the parties.
Overhauling: Projected according to the TPPs contract with its service provider, which was calculated according to the amount of energy dispatch throughout
the projection.
Insurance: Parnaba III is entirely insured on its fixed and variable revenues. The insurance premium payment was annually adjusted by Brazilian inflation-index
IPCA.
Fixed costs breakdown
350
306
300
250
R$ MM
203
200
156
150
122
100
47
57
54
57
62
66
69
73
77
86
86
90
96
101
112
119
125
132
139
154
155
164
173
182
50
0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042
Source: Eneva JR
O&M
ANEEL fee
TUST
CCEE contribution
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Overhauling
Insurance
37
Assumptions
Eneva Participaes Judicial Recovery: Parnaba III
Variable costs
Variable O&M costs: Projected according to the expected gross energy dispatch. A unit O&M cost (R$/MWh) annually adjusted by Brazilian inflation-index
IPCA was then applied on the dispatched energy.
RGR over variable revenues: As per regulation requirements, Parnaba III contributes 1.0% of its variable revenues, net of deductions, to Eletrobras R&D fund,
RGR.
Fuel purchase: Variable fuel purchase has been projected according to expected gross energy dispatch. Fuel price is contractually determined by Parnaba III
and the gas producers, and was annually adjusted by Brazilian inflation-index IPCA.
Variable-lease agreement: Calculated as the difference between: (i) total revenues and; (ii) fixed TPPs revenues; (iii) variable TPPs costs; and (iv) taxes,
regulatory fees and insurance.
Total costs
Please find below the cost projection that has been used for Parnaba III:
Total costs projection
700,0
641
296
600,0
500
R$ MM
500,0
410
400,0
300,0
342
273
47
200,0
100,0
226
308
295
54
224
204
241
50
143
153
53
118
171
59
90
106
112
180
62
118
190
201
212
66
69
73
125
131
139
228
82
146
236
81
154
249
86
163
263
91
172
277
151
107
325
112
343
119
362
125
382
146
181
202
213
225
237
147
155
192
474
173
164
132
96
191
425
449
250
264
278
294
556
310
327
345
364
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042
Source: Eneva JR
Variable costs
Fixed costs
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38
Assumptions
Eneva Participaes Judicial Recovery: Parnaba III
Depreciation
Total fiscal depreciation of property, plant & equipment is done in 10 years (at a 10% p.y. rate).
Total accounting depreciation of property, plant & equipment is done in 25 years (at a 4% p.y. rate).
Capex
Major capital expenditures were done during the construction period (2011-2015). Throughout the projection period, with exceptions to 2015, maintenance Capex
is included within the O&M costs (Overhauling).
Income taxes
The TPP is taxed within the real regime, with income taxes and social contribution rates at 25% and 9% respectively. It is worth mentioning, however, that
Parnaba III owns the following fiscal benefits:
Lucro da Explorao Exploration Profit, granted by SUDENE, from 2014 to 2023; and
Accelerated depreciation which allows the TPP to depreciate its items with a 10% annual depreciation rate.
Working capital
The projection considers an average of 45 days for account receivables on revenues and 50 days for accounts payable on costs and expenses.
Source: Eneva JR
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39
Assumptions
Eneva Participaes Judicial Recovery: Parnaba IV
Revenues
ACL revenues: Calculated based on the expected net energy dispatch, estimated by Eneva JRs management, and the agreed payment per dispatched
megawatt-hour, which is specified in the PPA agreement with Kinross Mining and Parnaba Comercializadora S.A..
It is worth mentioning that, albeit the current ACL expires in 2019, the projection assumes that such contract will be renovated until 2028.
Please find below the revenue projection that has been used for Parnaba IV.
350
430
430
PPA Renewal
300
380
250
350,0
306
250,0
200
221
221
221
221
221
221
221
221
221
221
221
221
221
221
221
221
221
221
221
221
221
221
221
221
221
R$MM
GW/h
300,0
150
200,0
150,0
100
100,0
50
50,0
-
0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043
CCEAL Revenues
Other revenues
Source: Eneva JR
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40
Assumptions
Eneva Participaes Judicial Recovery: Parnaba IV
Deductions
Deduction taxes: Deductions on gross revenues comprise PIS and Cofins at rates of 1.65% and 7.60% respectively. Given that the TPP uses production factors
in order to deliver energy, the TPP has the right to claim PIS and Cofins credits.
Fixed costs
O&M fixed costs: Calculated according to current contract assumptions, and have been annually adjusted by Brazilian inflation-index IPCA.
ANEEL fees: Contractually agreed; it is a fixed fee on the total installed capacity of the TPP, and was annually adjusted by Brazilian inflation-index IPCA.
TUST: Contractually agreed; it is a fixed tariff on the total installed capacity of the TPP, net of transmission losses, and was annually adjusted by Brazilian
inflation-index IPCA.
CCEE contribution: Fixed contribution on the total installed capacity of the TPP. It was annually adjusted by Brazilian inflation-index IPCA.
Overhauling: Projected according to the TPPs contract with its service provider, which was calculated according to the amount of energy dispatch throughout
the projection.
Insurance: Parnaba IV is entirely insured on its revenues. The insurance premium payment was annually adjusted by Brazilian inflation-index IPCA.
R$ MM
50
47
40
30
20
17
17
15
14
14
15
16
17
18
19
20
21
22
23
25
26
27
29
30
32
34
36
38
40
42
44
10
0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043
Source: Eneva JR
O&M
ANEEL fee
TUST
CCEE contribution
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Overhauling
Insurance
41
Assumptions
Eneva Participaes Judicial Recovery: Parnaba IV
Variable costs
Variable O&M costs: Projected according to the expected gross energy dispatch. A unit O&M cost (R$/MWh) annually adjusted by Brazilian inflation-index
IPCA was then applied on the dispatched energy.
RGR over variable revenues: As per regulation requirements, Parnaba IV contributes 1.0% of its variable revenues, net of deductions, to Eletrobras R&D fund,
RGR.
Fuel purchase: Variable fuel purchase has been projected according to expected gross energy dispatch. Fuel price is contractually determined by Parnaba IV
and the gas producers, and was annually adjusted by Brazilian inflation-index IPCA.
Total costs
Please find below the cost projection that has been used for Parnaba III:
180
161
153
R$ MM
160
145
137
140
130
120
100
80
49
48
48
50
53
55
47
40
17
15
14
14
15
16
17
33
34
35
39
30
32
37
20
60
59
17
42
65
69
62
20
18
19
44
46
49
73
21
51
77
22
54
81
23
57
85
25
60
90
26
64
95
100
27
67
29
71
105
30
75
111
32
79
117
34
83
123
47
165
47
44
44
42
40
38
36
88
92
98
103
109
115
121
128
0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043
Source: Eneva JR
Variable costs
Fixed costs
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42
Assumptions
Eneva Participaes Judicial Recovery: Parnaba IV
Depreciation
Total fiscal depreciation of property, plant & equipment is done in 10 years (at a 10% p.y. rate).
Total accounting depreciation of property, plant & equipment is done in 25 years (at a 4% p.y. rate).
Capex
Major capital expenditures were done during the construction period (2011-2014). Throughout the projection period, maintenance Capex is included within the
O&M costs (overhauling).
Income taxes
The TPP is taxed within the real regime, with income taxes and social contribution rates at 25% and 9% respectively. It is worth mentioning, however, that
Parnaba IV owns the following fiscal benefits:
Lucro da Explorao Exploration Profit, granted by SUDENE, from 2014 to 2023; and
Accelerated depreciation which allows the TPP to depreciate its items with a 10% annual depreciation rate.
Working capital
The projection considers an average of 45 days for account receivables on revenues and 50 days for accounts payable on costs and expenses.
Source: Eneva JR
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International, a Swiss entity. All rights reserved.
43
Assumptions
PGN
Revenues
The results presented below represent 70% of the total revenues that the Consortium generates.
Gas contracts revenues: Based on the gas demand from the 4 TPPs, these revenues match the fuel purchase costs of the downstream business.
Fixed revenues: The TPP has an agreement with the gas producers to pay a fixed-lease, which is contractually determined by the parties.
Variable revenues: The variable-lease revenues, which derive exclusively from Parnaba I and III, were calculated based on the difference between: (i) total
revenues and; (ii) fixed revenues; (iii) variable costs; and (iv) taxes, regulatory fees and insurance.
Condensate gas: It is a low-density liquid present in gas fields. This revenue line was projected by multiplying volume in million Boe (barrel of oil equivalent) and
the condensate price in million reais. It represents an average of 0.5% of the total revenue up until the end of the contracts with the TPPs.
R$ MM
1200,0
1000,0
738
800,0
609
600,0
400,0
200,0
178
4
140
150
3
149
437
287
791
703
173
4
158
457
629
111
4
167
348
133
4
176
391
743
141
4
186
412
784
149
5
196
435
828
157
5
207
459
873
165
5
218
485
921
175
5
230
512
1.026
972
184
6
243
540
194
6
256
570
1.129
1.078
984
205
2
270
601
1.014
157
6
165
2
243
256
579
591
1.070
174
2
270
623
184
2
285
658
194
2
301
694
313
0
2
330
0
2
346
0
310
328
346
122
0
122
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040
Source: E.ON
Gas contract
Fixed rental
Condensate
Variable rental
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44
Assumptions
PGN
Deductions
The results presented below represent 70% of the Consortiums deductions.
Deduction taxes: Deductions on gross revenues comprise PIS and Cofins at rates of 1.65% and 7.60% respectively, and ICMS (which is exclusively on gas
sales) at a 4.6% rate. Additionally, it was considered PIS and Cofins credit of 1.65% + 7.60% on 50% over Opex, abandonment costs, exploration expenses and
depreciation.
Special participations: A progressive tax applied on the gas production exceeding 450 thousand cubic meters of BOE from each well.
ANEEL fees: Calculated according to current contract assumptions, annually adjusted by the Brazilian inflation-index IPCA.
Royalties: It was projected as 10.0% of the total gross revenues throughout the entire projection period.
Costs
The results presented below represent 70% of the Consortiums Opex and other costs
Opex: Based on the 2015 budget and production projection, adjusted by the Brazilian inflation-index IPCA. It is worth noticing the depletion of the wells from 2032
up to 2036.
Landowner share: According to Brazilian law, the landowner must receive 1.0% of the total revenue.
Easement Agreement: Pipelines have several kilometers of length, and pass over farms and lands owned by third parties. In this contract, the owners of such
lands grant a right of access and easement to the construction, maintenance and removal of the pipeline. In exchange for such services, the Consortium must pay
an insurance and an indexed amount, which is paid periodically.
Abandonment costs: As per regulation requirements, once the gas well is depleted, the company must remove the equipment, plug the well and remediate the
surface so as to prevent the leakage of hydrocarbons and any damage to the environment in the surrounding area. E.ONs management considered an
assumption of R$ 1.5 million per well. The abandonment costs were more substantial in 2040, given that the wells will be closed at the same year.
R$ MM
158
82
46
56
73
86
101
93
89
98
104
115
120
127
134
140
70
67
71
26
2015
Source: E.ON
52
76
120
2016
2017
2018
2019
Opex
2020
2021
2022
2023
2024
Landowner share
2025
2026
2027
2028
2029
2030
Easement agreement
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2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
45
Assumptions
PGN
Expenses
The results presented below represent 70% of the Consortiums expenses.
Rental to ANP: Calculated according to current contract assumptions, adjusted by the Brazilian inflation-index IPCA.
SG&A: Composed by three factors: production, development & infrastructure and exploration. It is important to mention that, in 2019, the end of exploration of
new gas fields causes a reduction in SG&A.
Exploration expenses: Projected as a combination of expenses from exploration, drilling and other finding expenditures (Seismic, injection wells, among others).
PGN Expenses projection
100
91
89
90
R$ MM
80
70
44
37
60
67
18
50
52
45
-
40
34
-
30
47
44
49
52
32
-
30
-
26
24
32
-
33
-
35
-
40
20
29
26
27
29
37
-
30
39
-
32
41
-
36
25
-
34
10
-
5
0
5
0-
0-
5
0
5
0
6
0
6
0
6
0
27
-
36
25
3
0
26
-
7
0
7
0
7
0
26
20
-
27
20
7
0
0-
0-
0-
0-
0-
17
-
14
-
13
-
16
14
13
0-
0-
0-
0
0-
0
0-
0
0-
0
0-
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040
Source: E.ON
Rental to ANP
R&D
SG&A
Exploration expenses
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International, a Swiss entity. All rights reserved.
46
Assumptions
PGN
Depreciation
The results presented below represent 70% of the Consortiums depreciation
Total depreciation of the infrastructure was projected at 20 years (at a 5% p.a. rate).
The depreciation rate of property, plant and equipment was projected based on the yearly production and proved developed reserves.
Capex
The results presented below represent 70% of the Consortiums Capex
Major capital expenditures has been projected as investments in development, and in the infrastructure that is built in order to connect the pipeline.
PGN Capex projection
500
450
474
13
R$ MM
400
350
225
333
300
250
195
221
200
150
148
186
100
118
101
42
97
32
50
50
187
41
41
69
60
92
87
90
87
90
42
32
32
32
32
50
-
55
58
55
58
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040
Source: E.ON
Drilling
Development
Infrastructure
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47
Assumptions
PGN
Income taxes
PGN is taxed with income taxes and social contribution rates at 25% and 9% respectively. It is worth mentioning, however, that PGN has the following fiscal
benefit:
Working capital
The table presents the average of days and drivers for each account.
PGN
Current assets
Accounts receivable
Taxes receivable
Inventory
Other receivables
Days
67
20
55
10
Driver
Days of revenues
Days of revenues
Days of revenues
Days of costs and capex
Current liabilities
Suppliers
Tax payables
Accounts payable
Short term debts
Other accounts payable
Days
51
27
17
0
7
Driver
Days of costs and capex
Days of revenues
Days of costs
Days of costs
Days of costs
Source: E.ON
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International, a Swiss entity. All rights reserved.
48
Contents
Glossary
I. Executive Summary
13
16
23
V. Valuation Methodology
27
VI. Assumptions
32
IX. Valuation
49
63
67
70
72
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49
V. Valuation Methodology
Valuation method
Company
Valuation criteria
Company
Valuation method
Sum of the parts
Parnaba IV Gerao de
Energia S.A.
2
3
Seival Gerao de
Energia Ltda.
Au II Gerao de
Energia S.A.
DCF
DCF
Valuation method
(A)
MPX Chile Holding Ltda.
Sul Gerao de Energia
Ltda.
8
10
ENEVA Comercializadora 11
= (A)1 + (C) 1
(C) =
de Combustveis Ltda.
ENEVA Solar
Empreendimentos Ltda.
12
Au III Gerao de
Energia Ltda.
13
14
ENEVA Comercializadora
de Energia Ltda.
15
(B) 2
(B)
(B)
Parnaba
Comercializadoras
income
statement and cash flow projections have
been incorporated into Parnaba IV.
(B)
Book value
(A)
Book value
(A)
Book value
(A)
Book value
SPE Ventos
Parnaba Gs Natural
S.A.
1 Adjusted
2 Adjusted
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16
Book value
Book value
Book value
Book value
Book value
Book value
Book value
Book value
(A)
(A)
(A)
(A)
(A)
(A)
(A)
(A)
DCF
Valuation
Eneva Participaes Judicial Recovery: Parnaba III
Income statement
2015
334.42
(6.65)
327.77
2016
401.27
(11.07)
390.20
2017
274.86
(7.55)
267.32
2018
218.14
(7.70)
210.45
2019
241.13
(2.39)
238.74
2020
254.40
(8.43)
245.97
2021
268.39
(8.89)
259.49
2022
283.15
(9.38)
273.77
2023
298.72
(9.90)
288.82
2024
315.15
(10.45)
304.71
2025
332.49
(10.60)
321.89
2026
350.77
(11.63)
339.14
2027
370.07
(12.28)
357.78
2028
390.42
(13.33)
377.09
(273.4)
(298.83)
(207.42)
(147.33)
(228.28)
(174.21)
(183.78)
(193.88)
(204.54)
(215.78)
(232.21)
(240.15)
(253.22)
(267.57)
EBITDA
54.33
91.37
59.90
63.11
10.46
71.76
75.71
79.88
84.28
88.93
89.68
99.00
104.57
109.52
EBITDA Margin
Depreciation/Amortization
EBT
IR & CS
EBT %
Net Incom e
0.17
(8.03)
46.30
(2.57)
-0.06
43.73
0.23
(8.44)
82.93
(6.33)
-0.08
76.60
0.22
(8.44)
51.45
(3.49)
-0.07
47.97
0.30
(8.44)
54.67
(3.81)
-0.07
50.86
0.04
(8.44)
2.02
0.00
2.02
0.29
(8.44)
63.32
(4.32)
-0.07
58.99
0.29
(8.44)
67.27
(4.87)
-0.07
62.40
0.29
(8.44)
71.44
(5.31)
-0.07
66.13
0.29
(8.44)
75.84
(5.80)
-0.08
70.04
0.29
(8.44)
80.48
(27.16)
-0.34
53.33
0.28
(8.44)
81.24
(27.42)
-0.34
53.82
0.29
(8.44)
90.55
(30.79)
-0.34
59.77
0.29
(8.44)
96.13
(32.68)
-0.34
63.44
0.29
(8.44)
101.08
(34.37)
-0.34
66.71
2029
411.89
(14.47)
397.42
2030
434.55
(11.10)
423.45
2031
458.45
(16.95)
441.50
2032
483.66
(18.29)
465.37
2033
510.26
(19.71)
490.56
2034
538.33
(21.20)
517.13
2035
567.93
(22.77)
545.16
2036
599.17
(23.83)
575.34
2037
632.13
(26.19)
605.94
2038
666.89
(28.04)
638.86
2039
703.57
(29.99)
673.58
2040
742.27
(32.04)
710.22
2041
783.09
(23.71)
759.38
2042
826.16
(36.50)
789.66
(282.30)
(347.35)
(314.25)
(331.55)
(349.80)
(369.06)
(389.38)
(417.39)
(433.45)
(457.31)
(482.49)
(509.06)
(650.68)
(566.66)
EBITDA
115.12
76.10
127.25
133.82
140.75
148.06
155.78
157.96
172.49
181.55
191.09
201.17
108.70
223.00
EBITDA Margin
Depreciation/Amortization
EBT
IR & CS
EBT %
Net Incom e
0.29
(8.44)
106.67
(36.27)
-0.34
70.41
0.18
(8.03)
68.07
(23.15)
-0.34
44.93
0.29
(8.03)
119.22
(40.54)
-0.34
78.69
0.29
(8.03)
125.79
(42.77)
-0.34
83.02
0.29
(8.03)
132.73
(45.13)
-0.34
87.60
0.29
(8.03)
140.04
(47.61)
-0.34
92.42
0.29
(8.03)
147.75
(50.23)
-0.34
97.51
0.27
(8.03)
149.93
(50.98)
-0.34
98.95
0.28
(8.03)
164.47
(55.92)
-0.34
108.55
0.28
(8.03)
173.52
(59.00)
-0.34
114.52
0.28
191.09
(64.97)
-0.34
126.12
0.28
201.17
(68.40)
-0.34
132.77
0.14
108.70
(36.96)
-0.34
71.75
0.28
223.00
(75.82)
-0.34
147.18
Total costs
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51
Valuation
Eneva Participaes Judicial Recovery: Parnaba III
Cash flow
2015
43.73
8.03
(5.81)
13.72
59.66
2016
76.60
8.44
(0.40)
(4.22)
80.42
2017
47.97
8.44
(0.00)
2.63
59.04
2018
50.86
8.44
(1.22)
58.09
2019
2.02
8.44
7.60
18.06
2020
58.99
8.44
(8.30)
59.14
2021
62.40
8.44
(0.36)
70.48
2022
66.13
8.44
(0.38)
74.20
2023
70.04
8.44
(0.40)
78.08
2024
53.33
8.44
(0.42)
61.35
2025
53.82
8.44
0.13
62.39
2026
59.77
8.44
(1.04)
67.17
2027
63.44
8.44
(0.51)
71.38
2028
66.71
8.44
(0.41)
74.74
13.83%
0.50
55.92
13.83%
1.50
66.22
13.83%
2.50
42.70
13.83%
3.50
36.91
13.83%
4.50
10.08
13.83%
5.50
29.00
13.83%
6.50
30.36
13.83%
7.50
28.08
13.83%
8.50
25.96
12.48%
9.50
20.08
12.48%
10.50
18.15
12.48%
11.50
17.37
12.48%
12.50
16.41
13.60%
13.50
13.36
2029
70.41
8.44
(0.49)
78.36
2030
44.93
8.03
5.70
58.66
2031
78.69
8.03
(6.76)
79.96
2032
83.02
8.03
(0.57)
90.48
2033
87.60
8.03
(0.60)
95.02
2034
92.42
8.03
(0.64)
99.81
2035
97.51
8.03
(0.67)
104.87
2036
98.95
8.03
0.11
107.10
2037
108.55
8.03
(1.57)
115.00
2038
114.52
8.03
(0.79)
121.76
2039
126.12
(0.83)
125.29
2040
132.77
(0.88)
131.89
2041
71.75
13.34
85.08
2042
147.18
(15.24)
131.94
Discount Factor
Discount rate
Discount period
Discounted cash flow
0.14
14.50
12.33
0.14
15.50
8.13
0.14
16.50
9.75
0.14
17.50
9.71
0.14
18.50
8.98
0.14
19.50
8.30
0.14
20.50
7.68
0.14
21.50
6.90
0.14
22.50
6.52
0.14
23.50
6.08
0.14
24.50
5.51
0.14
25.50
5.10
0.14
26.50
2.90
0.14
27.50
3.96
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
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52
Valuation
Eneva Participaes: Parnaba III
Valuation
512.43
(78.82)
14.10
3.85
68.15
(120.00)
(6.92)
(34.75)
(3.25)
433.62
303.53
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
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53
Valuation
Eneva Participaes Judicial Recovery: Parnaba IV
Income statement
2015
63.56
(2.37)
61.19
2016
67.73
(2.58)
65.15
2017
75.35
(3.71)
71.64
2018
79.50
(4.66)
74.84
2019
83.87
(5.56)
78.31
2020
88.49
(5.87)
82.62
2021
93.35
(6.19)
87.17
2022
98.49
(6.52)
91.96
2023
103.90
(6.88)
97.02
2024
109.62
(7.26)
102.36
2025
115.65
(7.65)
107.99
2026
122.01
(8.07)
113.94
2027
128.72
(8.51)
120.21
2028
135.80
(9.00)
126.80
2029
143.27
(9.49)
133.78
(46.84)
(49.12)
(48.36)
(47.98)
(49.75)
(52.51)
(55.43)
(58.50)
(61.75)
(65.18)
(68.77)
(72.59)
(76.62)
(80.59)
(85.10)
EBITDA
14.35
16.03
23.29
26.86
28.56
30.11
31.74
33.46
35.27
37.19
39.22
41.35
43.59
46.20
48.67
EBITDA Margin
Depreciation/Amortization
EBT
IR & CS
EBT %
Net Incom e
0.23
(6.45)
7.90
0.00
7.90
0.25
(6.61)
9.42
0.00
9.42
0.33
(6.61)
16.68
(0.60)
-0.04
16.08
0.36
(6.61)
20.25
(0.95)
-0.05
19.30
0.36
(6.61)
21.95
(1.10)
-0.05
20.85
0.36
(6.61)
23.50
(1.24)
-0.05
22.26
0.36
(6.61)
25.13
(1.39)
-0.06
23.75
0.36
(6.61)
26.85
(1.54)
-0.06
25.31
0.36
(6.61)
28.66
(1.70)
-0.06
26.96
0.36
(6.61)
30.58
(4.84)
-0.16
25.74
0.36
(6.61)
32.61
(11.01)
-0.34
21.60
0.36
(6.61)
34.74
(11.81)
-0.34
22.93
0.36
(6.61)
36.98
(12.57)
-0.34
24.40
0.36
(6.61)
39.59
(13.46)
-0.34
26.13
0.36
(6.61)
42.06
(14.30)
-0.34
27.76
2030
151.15
(10.01)
141.14
2031
159.46
(10.56)
148.90
2032
168.23
(11.14)
157.09
2033
177.48
(11.75)
165.73
2034
187.25
(12.44)
174.80
2035
197.54
(13.12)
184.42
2036
208.41
(13.84)
194.57
2037
219.87
(14.60)
205.27
2038
231.96
(15.41)
216.56
2039
244.72
(16.25)
228.47
2040
258.18
(17.14)
241.04
2041
272.38
(18.08)
254.30
2042
287.36
(19.07)
268.29
2043
303.17
(20.12)
283.05
(89.80)
(94.74)
(99.97)
(105.49)
(110.82)
(116.94)
(123.39)
(130.20)
(137.36)
(144.94)
(152.93)
(161.37)
(170.27)
(179.66)
51.34
54.16
57.12
60.25
63.98
67.48
71.18
75.07
79.20
83.53
88.11
92.93
98.02
103.39
0.36
(6.45)
44.89
(15.21)
-0.34
29.68
0.36
(6.45)
47.71
(16.17)
-0.34
31.54
0.36
(6.45)
50.67
(17.17)
-0.34
33.50
0.36
(6.45)
53.80
(18.24)
-0.34
35.56
0.37
(6.45)
57.53
(19.51)
-0.34
38.03
0.37
(6.45)
61.03
(20.70)
-0.34
40.34
0.37
(6.45)
64.73
(21.95)
-0.34
42.77
0.37
(6.45)
68.62
(23.28)
-0.34
45.34
0.37
(6.45)
72.75
(24.68)
-0.34
48.07
0.37
(6.45)
77.09
(26.15)
-0.34
50.93
0.37
88.11
(27.71)
-0.31
60.40
0.37
92.93
(29.35)
-0.32
63.58
0.37
98.02
(31.08)
-0.32
66.94
0.37
103.39
(32.90)
-0.32
70.48
Total costs
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54
Valuation
Eneva Participaes Judicial Recovery: Parnaba IV
Cash flow
2015
7.90
6.45
(2.25)
6.21
18.32
2016
9.42
6.61
(0.00)
(0.18)
15.86
2017
16.08
6.61
(0.00)
(0.90)
21.78
2018
19.30
6.61
(0.45)
25.47
Discount Factor
Discount rate
Discount period
Discounted cash flow
13.83%
0.50
17.17
13.83%
1.50
13.05
13.83%
2.50
15.75
13.83%
3.50
16.18
2019
20.85
6.61
(0.19)
27.28
2020
22.26
6.61
(0.15)
28.72
2021
23.75
6.61
(0.16)
30.19
2022
25.31
6.61
(0.17)
31.75
2023
26.96
6.61
(0.18)
33.39
2024
25.74
6.61
(0.19)
32.16
2025
21.60
6.61
(0.20)
28.01
2026
22.93
6.61
(0.21)
29.33
2027
24.40
6.61
(0.22)
30.79
2028
26.13
6.61
(0.27)
32.47
2029
27.76
6.61
(0.24)
34.13
13.83% 13.83%
4.50
5.50
15.23
14.08
13.83%
6.50
13.01
13.83%
7.50
12.01
13.83%
8.50
11.10
12.48%
9.50
10.52
12.48%
10.50
8.15
12.48%
11.50
7.59
12.48%
12.50
7.08
12.48%
13.50
6.64
13.60%
14.50
5.37
2030
29.68
6.45
(0.26)
35.87
2031
31.54
6.45
(0.28)
37.71
2032
33.50
6.45
(0.29)
39.65
2033
35.56
6.45
(0.31)
41.70
2034
38.03
6.45
(0.39)
44.09
2035
40.34
6.45
(0.35)
46.44
2036
42.77
6.45
(0.37)
48.86
2037
45.34
6.45
(0.39)
51.41
2038
48.07
6.45
(0.41)
54.11
2039
50.93
6.45
(0.43)
56.95
2040
60.40
(0.45)
59.94
2041
63.58
(0.48)
63.10
2042
66.94
(0.51)
66.43
2043
70.48
(0.53)
69.95
Discount Factor
Discount rate
Discount period
Discounted cash flow
13.60%
15.50
4.97
13.60%
16.50
4.60
13.60%
17.50
4.26
13.60%
18.50
3.94
13.60%
19.50
3.67
13.60%
20.50
3.40
13.60%
21.50
3.15
13.60%
22.50
2.92
13.60%
23.50
2.70
13.60%
24.50
2.50
13.60%
25.50
2.32
13.60%
26.50
2.15
13.60%
27.50
1.99
13.60%
28.50
1.85
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
55
Valuation
Eneva Participaes Judicial Recovery: Parnaba IV
Valuation
217.34
(166.60)
0.33
0.22
18.88
(173.30)
4.58
10.43
5.61
(6.05)
(27.32)
50.73
35.51
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
56
Valuation
Eneva Participaes Judicial Recovery: Parnaba Participaes
Parnaba Participaes sum of the parts
303.53
35.51
37.29
0.25
Taxes recoverable
1.51
Intercompany loan
29.85
Afac
Taxes payable
Account payable
Equity Value
Equity Value @ 50%
7.20
(1.35)
(0.17)
376.34
188.17
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57
Valuation
PGN
Income Statement
2015
609.22
(97.46)
511.76
(46.38)
465.39
(92.01)
373.38
72.96%
(150.20)
223.18
(56.70)
-25.41%
166.48
2016
738.25
(136.92)
601.34
(52.44)
548.90
(88.56)
460.34
76.55%
(144.21)
316.13
(73.18)
-23.15%
242.94
2017
791.07
(140.21)
650.87
(55.79)
595.08
(66.83)
528.25
81.16%
(135.20)
393.05
(92.04)
-23.42%
301.01
2018
629.02
(107.27)
521.75
(81.79)
439.97
(51.96)
388.01
74.37%
(113.39)
274.63
(65.58)
-23.88%
209.04
2019
703.28
(122.28)
581.00
(72.85)
508.15
(44.66)
463.49
79.77%
(108.38)
355.11
(84.61)
-23.83%
270.50
2020
743.19
(131.08)
612.11
(76.40)
535.71
(33.54)
502.18
82.04%
(104.57)
397.61
(94.78)
-23.84%
302.82
2021
784.24
(139.18)
645.05
(86.12)
558.93
(31.55)
527.39
81.76%
(95.91)
431.48
(102.85)
-23.84%
328.63
2022
827.56
(163.73)
663.84
(100.51)
563.32
(30.02)
533.30
80.34%
(96.00)
437.31
(104.23)
-23.83%
333.08
2023
873.23
(181.18)
692.05
(88.71)
603.34
(31.67)
571.67
82.61%
(96.08)
475.59
(113.34)
-23.83%
362.25
2024
921.42
(194.19)
727.22
(93.46)
633.77
(33.41)
600.35
82.55%
(96.15)
504.20
(171.43)
-34.00%
332.77
2025
972.25
(204.78)
767.46
(98.47)
668.99
(35.25)
633.75
82.58%
(105.92)
527.83
(179.46)
-34.00%
348.37
2028
984.04
(198.51)
785.53
(114.54)
670.99
(40.71)
630.28
80.24%
(92.62)
537.66
(182.81)
-34.00%
354.86
2029
1,014.24
(200.85)
813.39
(120.33)
693.06
(35.60)
657.46
80.83%
(82.10)
575.36
(195.62)
-34.00%
379.73
2030
1,069.94
(212.13)
857.81
(126.83)
730.98
(24.68)
706.31
82.34%
(82.12)
624.19
(212.22)
-34.00%
411.96
2031
1,128.91
(224.04)
904.88
(133.68)
771.19
(26.03)
745.17
82.35%
(82.13)
663.03
(225.43)
-34.00%
437.60
2032
1,191.22
(236.62)
954.60
(140.49)
814.11
(27.46)
786.65
82.41%
(82.16)
704.49
(239.53)
-34.00%
464.97
2033
312.82
(97.78)
215.03
(69.72)
145.32
(20.48)
124.84
58.05%
(35.86)
88.97
(30.25)
-34.00%
58.72
2034
330.27
(103.73)
226.54
(67.30)
159.23
(16.51)
142.72
63.00%
(33.05)
109.67
(37.29)
-34.00%
72.38
2035
345.87
(109.38)
236.49
(70.92)
165.57
(14.36)
151.21
63.94%
(31.27)
119.93
(40.78)
-34.00%
79.16
2036
121.70
(55.53)
66.17
(26.13)
40.04
(13.32)
26.72
40.38%
(10.43)
16.29
(5.54)
-34.00%
10.75
2037
N.a.
N.a.
-
2038
N.a.
N.a.
-
2026
1,025.65
(214.06)
811.59
(103.75)
707.83
(37.18)
670.65
82.63%
(102.90)
567.75
(193.04)
-34.00%
374.72
2027
1,078.12
(216.71)
861.42
(119.99)
741.43
(39.23)
702.20
81.52%
(100.01)
602.19
(204.74)
-34.00%
397.44
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
2039
2040
7.32
7.32
(158.17)
(150.85)
(150.85)
N.a. -2062.16%
(150.85)
N.a.
0.00%
(150.85)
58
Valuation
PGN
Cash Flow
2015
166.48
150.20
(8.77)
(473.74)
(165.83)
2016
242.94
144.21
(18.81)
(333.06)
35.29
2017
301.01
135.20
(20.65)
(220.83)
194.73
2018
209.04
113.39
40.22
(186.79)
175.86
2019
270.50
108.38
(24.41)
(101.44)
253.03
2020
302.82
104.57
(11.55)
(92.16)
303.69
2021
328.63
95.91
(11.65)
412.89
2022
333.08
96.00
(7.79)
421.29
2023
362.25
96.08
(13.14)
445.19
2024
332.77
96.15
(10.29)
418.64
2025
348.37
105.92
(7.69)
(87.11)
359.48
2026
374.72
102.90
(11.29)
(90.15)
376.18
2027
397.44
100.01
(9.00)
(86.70)
401.75
Discount factor
Discount rate
Discount period
Discounted cash flow
0.15
0.50
(154.54)
0.15
1.50
28.56
0.15
2.50
136.88
0.15
3.50
107.35
0.15
4.50
134.15
0.15
5.50
139.83
0.15
6.50
165.11
0.15
7.50
146.31
0.15
8.50
134.28
0.15
9.50
114.84
0.15
10.50
86.06
0.15
11.50
78.60
0.15
12.50
73.25
2028
354.86
92.62
22.01
(89.72)
379.77
2029
379.73
82.10
(10.41)
451.43
2030
411.96
82.12
(14.37)
479.71
2031
437.60
82.13
(12.54)
507.20
2032
464.97
82.16
(13.34)
533.79
2033
58.72
35.86
196.01
290.59
2034
72.38
33.05
(5.54)
99.89
2035
79.16
31.27
(3.46)
106.97
2036
10.75
10.43
44.62
65.80
2037
21.20
21.20
0.15
13.50
60.43
0.15
14.50
62.69
0.15
15.50
58.14
0.15
16.50
53.65
0.15
17.50
49.27
0.15
18.50
23.41
0.15
19.50
7.02
0.15
20.50
6.56
0.15
21.50
3.52
0.15
22.50
0.99
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
2038
-
0.15
23.50
-
2039
-
0.15
24.50
-
2040
(150.85)
32.87
(117.98)
0.15
25.50
(3.66)
59
Valuation
PGN
Valuation
1,512.70
(478.63)
130.53
9.83
(721.85)
18.15
84.71
1,034.08
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
60
Valuation
Conclusion
Summary of Results
Based on the scope of our report, and subject to the assumptions, restrictions, and limitations described herein, we have estimated the fair value of Eneva
Participaes and PGN as of December, 2014 as presented below.
PGN
17.76
1,512.70
317.26
82.68
18.65
(478,63)
1,034.08
R$ MM
R$ mm
46.41
188.17
151.77
Parnaba III Parnaba IV
Parnaba
Eneva
Parnaba
Sum of the
Eneva
ParticipaesParticipaes Book Values ParticipaesParticipaes
adjsutments
Holding
in Judicial
Adjustments Recovery
Equity Value
Bottom
(-5%)
Central
Up p er
(-5%)
302.15
317.26
332.36
PGN
Enterprise
value
Adjustments
PGN Equity
value
Equity Value
Bottom
(-5%)
Central
Up p er
(-5%)
984.96
1,034.08
1,083.20
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
61
Valuation
Conclusion (cont.)
In providing its services, KPMG relied on information provided by Eneva RJs and E.ONs Management and discussions with your employees or other
representatives, and KPMG is not responsible for independently verifying any information publicly available or supplied to it in the preparation of this report.
KPMG does not express an opinion on the reliability of the information presented above, and determines that any errors, changes or modifications of such
information could significantly affect the findings of KPMG. Based on the terms of our proposal, data processing and information does not imply acceptance or
certification of these as true by KPMG.
During the course of our work, KPMG performed testing procedures as needed. However, we emphasize that our evaluation work did not constitute an audit of
financial statements or other information submitted to us by the Eneva RJs and E.ONs Management and should not be treated as such.
Neither KPMG nor the Eneva RJs or E.ONs Management can ensure that future results will meet projected results, due to unforeseen external or internal
factors.
We emphasize that a full understanding of this report and its conclusion is only possible through its complete reading. Thus, one should not draw conclusions by
reading just part of it.
It is imperative to point out that this version of the valuation report is a free translation from Portuguese to English; therefore, in case of discrepancies between
the report in Portuguese sent on April 13, 2015 and the free translation report, the former shall prevail in all matters.
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
62
Contents
Glossary
I. Executive Summary
13
16
23
V. Valuation Methodology
27
VI. Assumptions
32
IX. Valuation
49
63
67
70
72
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
63
Appendix I
Curricula vitae
Name
Position
Sector of expertise
Name
Position
Qualifications
Experience
Throughout 15 years of experience, he has participated in a wide range of activities, including: financial advisory to clients in
mergers and acquisitions, privatizations and offerings.
Before joining KPMG Brazil he worked at Acar Guarani (one of the largest Sugar and Ethanol Company in Brazil) and was the
CFO at Cimentos Liz (one the largest cement group in Brazil).
Sector of experience
Electricity, Oil and Gas, Sugar and Alcohol. Agriculture, Financial Sevices and Consumer Goods
Qualifications
Experience
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
64
Appendix I (cont.)
Curricula vitae
Name
Position
Augusto Sales
Sector of expertise
Name
Rben Palminha
Position
Qualifications
Postgraduate degree in Finance, with specialization in Corporate Finance INDEG-IUL, (Lisbon, Portugal)
Specialization in Finance INDEG-IUL (Lisbon, Portugal)
Graduate in Finance ISCTE-IUL (Lisbon, Portugal)
Experience
He joined KPMG Corporate Finance in 2006. Since then, Rben has participated in Energy and Infrastructure projects in various
countries, assisting Public and Private entities, accumulating skills in Project Finance, PPP Projects, M&A and Valuations.
Qualifications
Experience
Sector of experience
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
65
Appendix I (cont.)
Curricula vitae
Name
Position
Qualifications
Experience
Has more than 7 years of experience in KPMG, ample experience in M&A services, and preparation of business plans and
valuations. In addition, Fabiano has developed several financial models and evaluated various intangible assets within Purchase
Price Allocation exercises.
Sector of experience
Banking, real estate, power, agribusiness, foods and beverages, retail and logistic.
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
66
Contents
Glossary
I. Executive Summary
13
16
23
V. Valuation Methodology
27
VI. Assumptions
32
IX. Valuation
49
63
67
70
72
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
67
Appendix II
Balance Sheet | PGN
5.01
112.49
14.39
102.57
5.00
130.53
108.55
6.03
63.36
42.21
18.15
15.85
39.79
7.15
117.07
942.32
12.81
1,358.59
32.47
3.80
84.71
978.31
19.06
1,503.03
R$ MM
Liabilities
Current
Suppliers
Income tax
Payroll
Loans and financing
Account payables w ith related parties
Other account payables
Non Current
Loans and financing
Provisions for retirement obligations
Shareholders Equity
Social Capital
Retained investments
Retained earnings
Total liabilities and shareholder equity
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
31/12/2013 31/12/2014
292.77
17.94
4.04
628.59
183.92
7.06
68.57
368.59
(212.89)
1,358.59
80.32
43.28
17.02
33.46
7.01
6.53
730.60
57.37
618.59
8.88
(100.03)
1,503.03
68
Appendix II
Balance Sheet | Eneva Participaes Judicial Recovery
31/12/2014
11.27
95.55
24.37
0.00
0.00
107.19
1.00
137.28
19.01
25.83
421.50
R$ MM
Passivo
Current
Suppliers
Payroll
Tax, rates and contribuitions
Others
Non-current
Long term liabilities
Shareholders' equity
Social Capital
Capital reserve
Patrimonial adjustment reserve
AFCI
Retained earnings or loss
Year profit
Total liabilities and shareholders' equity
* Non audited
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
31/12/2014
55.31
1.40
10.65
5.42
126.76
266.76
62.00
1.00
25.75
(62.42)
(71.14)
421.50
69
Contents
Glossary
I. Executive Summary
13
16
23
V. Valuation Methodology
27
VI. Assumptions
32
IX. Valuation
49
63
67
70
72
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
70
Appendix III
Book value
5
6
7
8
10
11
12
13
14
15
16
Eneva Participaes
Stake (%)
50%
19.75
50%
4.67
50%
2.34
44.00
50%
22.00
0.22
50%
0.11
13.15
50%
6.57
(0.04)
100%
(0.04)
8.42
100%
8.42
2.52
100%
2.52
100%
19.54
100%
19.54
1.47
100%
1.47
71
Contents
Glossary
I. Executive Summary
13
16
23
V. Valuation Methodology
27
VI. Assumptions
32
IX. Valuation
49
63
67
70
72
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
72
Appendix IV
Discount rate
Discount rate
Source:
During Sudene
After Sudene
(a)
3.4%
3.4%
3.4%
(b)
2.0%
2.0%
2.0%
(c)
5.5%
5.5%
5.5%
(d) = [1 + a] / [1 + b] * [1 + c] -1
6.9%
6.9%
6.9%
(e)
4.6%
4.6%
4.6%
(f)
0.57
0.57
0.57
D/E
(g)
78.0%
78.0%
78.0%
(h)
15.3%
34.0%
34.0%
0.95
0.86
0.86
RF Adjusted
Releverage beta
(i) = f * [1 + [g * [1 - h]]]
(j)
2.18%
2.18%
2.18%
Size premium
(k)
1.98%
1.98%
1.98%
Alpha factor
(L)
0.00%
0.00%
2.00%
Re= d + [e * i] + j + k
15.4%
15.06%
17.06%
(m)
56.2%
56.2%
56.2%
(Re)
15.4%
15.1%
17.1%
(n)
43.8%
43.8%
43.8%
(h)
15.3%
34.0%
34.0%
(p)
11.8%
9.2%
9.2%
13.83%
12.48%
13.60%
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
73
Appendix IV
Discount rate
PGN
Discount rate
Source:
(a) Risk free rate Bloomberg
During Sudene
After Sudene
(a)
3.4%
3.4%
(b)
2.0%
2.0%
(c)
5.5%
5.5%
(d) = (1 + a) / (1 + b) * (1 + c) -1
6.9%
6.9%
(e)
4.6%
4.6%
(f)
0.98
0.98
D/E
(g)
42.9%
42.9%
(h)
23.9%
34.0%
(i) = f * {1 + [g * (1 - h)]}
1.31
1.26
RF Adjusted
Releverage beta
(j)
2.18%
2.18%
Size premium
(k)
1.98%
1.98%
Re = d + (e * i) + j + k
17.1%
16.9%
% Equity
(L)
70.0%
70.0%
% Debt
(m)
30.0%
30.0%
(n)
13.9%
13.9%
(h)
23.9%
34.0%
(o) = n * (1 - h)
10.6%
9.2%
= Re * L + o * m
15.14%
14.58%
2015 KPMG Corporate Finance Ltda. is a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss entity. All rights reserved.
74
Attachment IV
Parnaba III Valuation Report
Eneva
Valuation
Analysis MEMORANDUM
PROJECT
36 INFORMATION
PREPARED
[INVESTOR]
March
31,TO:
2015
DATE: [X]
Table of Contents
Section I.
Executive Summary
Section II.
Appendix I.
Multiple Database
Appendix II.
Contacts
I
Executive Summary
Executive Summary
Introduction (1/2)
Eneva S.A
Praia do Flamengo, 66 9th floor
22210030 Rio de Janeiro RJ Brazil
Dear Sirs,
We understand that Eneva S.A. (Company or Eneva) is entertaining the possibility of acquiring the stake currently owned directly and/or indirectly
by Petra Energia S.A. (Petra) in UTE Parnaba I, UTE Parnaba III and UTE Parnaba IV1 (collectively referred to herein as UTEs), equivalent to
30% of the capital stock in each of such UTEs (Petra UTE Shares).
For the purposes of the foregoing, Eneva have asked G5 Consultoria e Assessoria Ltda. (G5 Evercore) to provide the Company with a valuation of
Petra UTE Shares.
In connection with the required analysis by G5 Evercore, please be advised that we have based our work on the information provided by or on
behalf of the Company and also endeavored the following specific reviews and discussions:
I.
Reviewed certain non-public internal financial statements, other non-public financial and operating data relating to Parnaba I, III and IV,
that were prepared and provided to us by the management of the Company;
II.
Reviewed certain financial projections relating to Parnaba I, III and IV, that were provided to us by the management of the Company;
III.
Discussed the past and current operations, financial projections, current financial condition and prospects of Parnaba I, III and IV with
certain members of senior management of the Company;
IV. Reviewed existing agreement between Petra and Eneva related to Parnaba I, III and IV, including existing shareholders agreements
and capital increase operations that occurred in the past;
V.
Reviewed the financial terms of certain publicly available transactions that we deemed to be relevant; and
VI. Discussed with management of the Company, but have not discussed with legal advisors of the Company, the potential impact of
certain ongoing litigations.
With respect to the financial projections of Parnaba I, III and IV which were provided to us, we have assumed that such financial projections have
been reasonably prepared by the Company on bases reflecting the best currently available estimates and good faith judgments of the future
competitive, operating and regulatory environments and related financial performance of Parnaba I, III and IV.
Furthermore, we were informed by the Company that Petra failed to contribute its share on capital increases of UTE Parnaba I, UTE Parnaba III
and UTE Parnaba IV duly approved in the past years. The amount due by Petra, sums R$ 70,9 MM, however, with penalties and interests applied,
the current total amount outstanding is R$ 93,0 MM.
Note [1]: UTE Parnaba IV refers to UTE Parnaba IV and Parnaba Gerao e Comercializao
Executive Summary
Introduction (2/2)
Notwithstanding our review of certain set of information provided by or on behalf of the Company, we have not made, nor assumed any
responsibility for making, any technical audit of the Companys operation nor carried out any independent valuation or appraisal of specific assets or
liabilities (contingent or otherwise) of the UTEs, nor have we been provided with any such appraisals, nor have we evaluated the solvency or fair
value of each of the UTEs under any state or federal laws relating to bankruptcy, insolvency or similar matters. Our valuation analysis is necessarily
based on economic, market and other conditions as in effect on, and the information made available to us as of, the date hereof. It is understood
that subsequent developments may affect this analysis and that we do not have any obligation to update, revise or reaffirm this assessment.
Likewise, we have not been asked to pass upon, nor express opinion with respect to any matter other than the valuation of the UTEs as of the date
hereof, to the holders of the Company. Our valuation analysis does not address the relative merits of the acquisition of Petra UTE Shares as
compared to other business or financial strategies that might be available to the Company, nor does it address the underlying business decision of
the Company to engage in such a transaction. We are not legal, regulatory, accounting or tax experts and have assumed the accuracy and
completeness of assessments by the Company and its advisors with respect to legal, regulatory, accounting and tax matters.
Furthermore, no representation or warranty, express or implied, is hereby made by G5 Evercore and/or its affiliates, managers, employees,
consultants, agents or representatives, as to the accuracy or completeness of the information provided to G5 Evercore and nothing contained herein
is, or shall be relied upon as, a representation, whether as to the past, the present or the future.
Finally, please be also advised that we have been engaged as financial advisor to the Company solely for the purpose of performing this valuation
analysis and will receive a fee in connection with the delivery of this analysis. In addition, the Company has agreed to reimburse certain of our
expenses and to indemnify us against certain liabilities arising out of our engagement. In addition, we and our affiliates may have in the past
provided, may be currently providing and in the future may provide, financial advisory services to the Company, or their respective affiliates, for
which we have received, and would expect to receive, compensation.
Based upon and subject to the foregoing, as of the date hereof, we present in this presentation a summary of the valuation analysis of Petra UTE
Shares.
Executive Summary
Parnaba I, Parnaba III e Parnaba IV Valuation Summary
Petras stake in Parnaba I, Parnaba III and Parnaba IV equity were valued by G5 Evercore according to different methodologies, detailed
below.
Valuation Methodologies
Methodology
Range
-15% / +15%
489
Cost of Capital:
Parnaba I
13,08%
Parnaba III
11,61%
Parnaba IV
28,10%
361
485
Trading EV/EBITDA Multiples
2015
396
8,0x 9,0x
326
6,5x 7,5x
Transaction EV/EBITDA
Multiples
8,0x 10,0x
Note [1]: Discounted by R$ 93 MM owed by Petra under the shareholders agreement regulation, due
to failure in contribution its share in capital increases occurred in the past
240
574
396
II
Valuation - Parnaba I, III and IV
E.ON
Petra
42,9%
Parnaba I
Parnaba III
Parnaba IV
50,0%
ENEVA / E.ON
Joint Venture (JV)
Parnaba I
70% Eneva
30% Petra
35% Eneva
Parnaba III
35% JV
30% Petra
35% Eneva
Parnaba IV
35% JV
30% Petra
Base Date
Source: Eneva
50,0%
Valuation - Eneva
Cost of Equity Calculation Methodology
CAPM Model
Cost of Equity
(Nominal R$)
Cost of Equity
Cost of Equity
Risk Free Rate
Inflation
Differential
(Nominal USD)
Levered Beta
Market Risk Premium
Country Risk
Unlevered Beta
Levered Beta
Risk Premium
Debt to Equity
Ratio
Country Risk
Long-Term
Long-Term
US Inflation
Brazil Inflation
Overview
Energy Source
Gas
675,2 MW
feb-13
Capacity Declared
660,0 MW
450 MWm
PPA Length
15 years
Inflexibility
0%
112,50 R$/MWh
Fuel Consumption
10,89 MMBtu/MWh
Fuel Costs
PPA Renovation
Economic Life
30 years
Financing Assumptions
Debt Amount (as of December, 2014)
Interest
Amortization Period
Amortization Start Year
Source: Eneva
6,10 R$/MMBtu
10
R$720MM
69% of Debt: TJLP + 2%
31% of Debt : IPCA + 5%
13 years
2015
Unit
R$/MWh
R$/KW - year
R$/KW - year
R$/KW - month
R$ MM
R$/MWh
R$ MM
R$/MWh
US$/MMBtu
R$/MWh
R$/MWh
R$/MMBtu
R$ MM
R$ MM
R$ MM
R$/MWh
2015
44,39
1,95
0,11
3,31
48,82
5,55
12,47
121,13
3,93
10,97
20,00
6,49
169,86
220,41
9,89
333,39
2016
47,47
2,09
0,12
3,54
47,72
5,99
12,91
130,06
4,41
11,77
21,58
7,01
183,31
233,95
10,52
305,51
2017
50,36
2,21
0,12
3,75
50,41
6,32
183,50
137,71
4,76
12,47
22,80
7,40
193,63
220,59
11,11
285,89
2018
53,01
2,33
0,13
3,95
53,03
6,65
13,74
144,92
5,27
13,12
23,98
7,79
203,70
176,91
11,69
258,05
2019
55,71
2,45
0,14
4,15
55,72
6,99
14,45
152,30
5,19
13,79
25,20
8,18
214,03
100,99
12,28
258,60
2020
58,54
2,57
0,14
4,36
58,55
7,35
15,19
160,02
4,96
14,49
26,48
8,60
224,88
91,87
12,91
274,07
2021
61,51
2,70
0,15
4,58
61,51
7,72
15,96
168,13
5,37
15,22
27,82
9,03
236,28
161,63
13,56
260,22
2022
64,63
2,84
0,16
4,81
64,63
8,11
16,76
176,65
5,64
15,99
29,23
9,49
248,26
217,91
14,25
299,96
2023
67,90
2,98
0,17
5,06
67,91
8,52
17,61
185,61
5,90
16,80
30,71
9,97
260,85
238,04
14,97
319,89
2024
71,34
3,13
0,17
5,31
71,35
8,95
39,92
195,02
6,20
17,65
32,27
10,48
274,07
239,58
15,73
343,79
2025
74,96
3,29
0,18
5,58
74,97
9,41
19,45
204,91
6,45
18,55
33,91
11,01
287,97
303,29
16,53
339,32
2026
78,76
3,46
0,19
5,87
78,77
9,88
20,43
215,30
6,72
19,49
35,63
11,57
302,57
339,06
17,36
352,93
2027
82,76
3,64
0,20
6,16
82,77
10,38
21,47
226,21
7,00
20,48
37,43
12,16
317,91
339,10
18,25
410,62
2028
86,95
3,82
0,21
6,48
86,96
10,91
22,56
237,68
7,26
21,52
39,33
12,77
334,03
343,18
19,17
425,90
2029
91,36
4,01
0,22
6,81
91,37
11,46
23,70
249,73
7,63
22,61
41,32
13,42
350,96
404,50
20,14
455,78
2030
95,99
4,22
0,23
7,15
96,00
12,04
24,90
262,39
8,12
23,75
43,42
14,10
368,76
446,75
21,16
472,56
Months in Operation
Avg. Installed Capacity
Availability
Real Internal Consumption
Grid Losses
Average Internal Consumption
Average Availability
Expected Dispatch
Physical Guarantee
Net Physical Guarantee
Net FID
Energy Traded in ACR
Energy Traded in ACL
Spot energy sold in ACR
Total Energy Dispatch
Energy Demanded in ACR
Energy sold/(bought) in ACL
ADOMP
Unit
2015
months
12
MWm
675,20
%
88%
%
1%
%
3%
% - 60 months
1%
% - 60 months
97%
%
100%
MWm
466,60
MWm
451,67
MWm
0,00
MWm
450,00
MWm
1,67
%
100%
MWh
5.231.601
MWh
5.024.485
MWh
14.661
MWh
5.387.239
2016
12
675,20
90%
1%
3%
1%
92%
100%
466,60
451,28
21,48
450,00
-20,21
100%
5.316.456
5.110.490
(177.497)
5.406.770
2017
12
675,20
95%
1%
3%
1%
91%
69%
466,60
450,94
28,84
450,00
-27,90
100%
3.863.196
3.716.285
(244.373)
3.711.995
2018
12
675,20
95%
1%
3%
1%
91%
46%
466,60
450,37
29,26
450,00
-28,89
100%
2.585.286
2.490.137
(253.115)
2.489.819
2019
12
675,20
95%
1%
3%
1%
91%
28%
466,60
449,79
26,71
450,00
-26,92
100%
1.591.026
1.533.721
(235.807)
1.534.314
2020
12
675,20
91%
1%
3%
1%
94%
30%
466,60
449,79
13,32
450,00
-13,53
100%
1.629.928
1.571.222
(118.504)
1.635.701
2021
12
675,20
95%
1%
3%
1%
95%
40%
466,60
449,79
7,56
450,00
-7,77
100%
2.260.623
2.179.201
(68.051)
2.183.187
11
2022
12
675,20
95%
1%
3%
1%
97%
48%
466,60
449,79
-0,05
450,00
-0,16
100%
2.676.014
2.579.630
(1.399)
2.586.480
2023
12
675,20
94%
1%
3%
1%
97%
47%
466,60
449,79
-0,87
450,00
0,66
100%
2.635.725
2.540.793
5.804
2.550.431
2024
12
675,20
89%
1%
3%
1%
97%
45%
466,60
449,79
-0,65
450,00
0,45
100%
2.385.555
2.299.633
3.931
2.451.298
2025
12
675,20
94%
1%
3%
1%
96%
49%
466,60
449,79
5,53
450,00
-5,74
100%
2.738.302
2.639.675
(50.250)
2.654.071
2026
12
675,20
95%
1%
3%
1%
96%
50%
466,60
449,79
3,14
450,00
-3,34
100%
2.783.776
2.683.512
(29.284)
2.687.866
2027
12
675,20
95%
1%
3%
1%
96%
46%
466,60
449,79
3,59
450,00
-3,80
100%
2.553.484
2.461.514
(33.252)
2.469.322
2028
12
675,20
91%
1%
3%
1%
96%
44%
466,60
449,79
3,50
450,00
-3,71
100%
2.387.363
2.301.376
(32.479)
2.403.984
2029
12
675,20
94%
1%
3%
1%
96%
45%
466,60
449,79
6,86
450,00
-7,07
100%
2.519.274
2.428.536
(61.891)
2.442.286
2030
12
675,20
94%
1%
3%
1%
97%
44%
466,60
449,79
1,69
450,00
-1,90
100%
2.449.088
2.360.878
(16.628)
2.376.948
1.479
1.095
2015
1.221
2016
1.126
2017
989
2018
1.065
849
881
2019
2020
2021
1.219
1.286
1.311
2022
2023
2024
2025
1.582
1.610
1.652
2026
2027
2028
1.806
2029
1.910
2030
356
211
236
245
261
2018
2019
2020
283
305
322
317
2022
2023
2024
377
394
413
436
463
199
62
2015
Source: Eneva
2016
2017
2021
12
2025
2026
2027
2028
2029
2030
EBT
Income Tax Paid
Depreciation and Amortization
Changes in Working Capital
Other Non-Cash Items
Capex
Debt Raised
Debt Paid
Total
2015
99
(2)
46
(4)
0
(13)
0
(57)
70
2016
97
(2)
46
3
0
(2)
0
(57)
86
Discount Rate
Cost of Equity
Risk Free Rate
Unlevered Beta
Levered Beta
Risk Premium
Country Risk
Debt (Target)
Equity / (Debt + Equity)
Debt / (Debt + Equity)
Inflation
Brazil
USA
Cost of Capital
Ke - US$
Ke - R$ Nominal
Source: Eneva
2017
(34)
0
46
17
0
(1)
0
(57)
-28
2018
145
(5)
46
(26)
0
(0)
0
(57)
103
2019
158
(6)
47
(3)
0
(0)
0
(57)
138
2020
179
(7)
47
(2)
0
0
0
(57)
159
2021
206
(9)
47
(1)
0
0
0
(57)
186
2022
232
(14)
47
(1)
0
0
0
(57)
207
2023
254
(17)
47
(1)
0
0
0
(57)
225
2024
254
(102)
47
1
0
0
0
(57)
143
2025
297
(117)
47
(3)
0
0
0
(57)
167
Source
9,76%
2,37%
0,33x
0,72x
6,96%
2,38%
2026
323
(126)
47
(2)
0
0
0
(57)
185
2027
345
(133)
47
(2)
0
0
0
(33)
223
2028
366
(140)
47
(2)
0
0
0
0
270
Date
12/03/2015
15/03/2015
15/03/2015
04/03/2015
9,76%
13,08%
13
16/03/2015
16/03/2015
2029
389
(148)
47
(1)
0
0
0
0
286
2030
417
(158)
47
(2)
0
0
0
0
303
Sources
Energy Source
Gas
176,0 MW
out-13
Capacity Declared
176,0 MW
98 MWm
PPA Length
15 years
Inflexibility
0%
114,71 R$/MWh
Fuel Consumption
8,84 MMBtu/MWh
Fuel Costs
Economic Life
R$122MM
Interest
CDI + 3%
Amortization Period
10 years
Net Intercompany Credit, as of December 2014, of R$ 34MM is not considered in the total
debt amount
30 years
Financing Assumptions
PPA Renovation
Source: Eneva
6,10 R$/MMBtu
14
2015
Unit
R$/MWh
R$/KW - year
R$/KW - year
R$/KW - month
R$ MM
R$/MWh
R$ MM
R$/MWh
US$/MMBtu
R$/MWh
R$/MWh
R$/MMBtu
R$ MM
R$ MM
R$ MM
R$/MWh
2015
63,06
1,95
0,11
4,60
2,88
5,38
3,45
123,50
3,93
172,96
20,00
6,48
20,91
123,18
2,45
346,32
2016
67,45
2,09
0,12
4,92
3,05
5,81
3,57
132,61
4,41
185,71
21,58
6,87
22,57
137,80
2,61
325,59
2017
71,54
2,21
0,12
5,21
3,22
6,14
3,64
140,40
4,76
196,63
22,80
7,40
23,84
73,71
2,76
315,02
2018
75,31
2,33
0,13
5,49
3,39
6,46
3,80
147,76
5,27
206,94
23,98
7,79
25,08
45,37
2,90
297,91
2019
79,15
2,45
0,14
5,77
3,56
6,78
3,99
155,28
5,19
217,47
25,20
8,18
26,35
26,05
3,05
305,16
2020
83,17
2,57
0,14
6,06
3,75
7,13
4,20
163,15
4,96
228,49
26,48
8,60
27,69
27,02
3,20
340,09
2021
87,38
2,70
0,15
6,37
3,93
7,49
16,78
171,42
5,37
240,08
27,82
9,03
29,09
36,91
3,37
307,78
2022
91,81
2,84
0,16
6,69
4,13
7,87
4,63
180,11
5,64
252,25
29,23
9,49
30,57
56,91
3,54
340,61
2023
96,47
2,98
0,17
7,03
4,34
8,27
4,87
189,24
5,90
265,04
30,71
9,97
32,12
54,94
3,72
373,10
2024
101,36
3,13
0,17
7,39
4,56
8,69
5,12
198,84
6,20
278,47
32,27
10,48
33,74
55,41
3,90
396,20
2025
106,50
3,29
0,18
7,76
4,80
9,13
5,37
208,92
6,45
292,59
33,91
11,01
35,46
53,54
4,10
410,84
2026
111,90
3,46
0,19
8,16
5,04
9,59
5,65
219,51
6,72
307,43
35,63
11,57
37,25
63,74
4,31
408,40
2027
117,57
3,64
0,20
8,57
5,29
10,08
5,93
230,64
7,00
323,01
37,43
12,16
39,14
70,90
4,53
463,75
2028
123,53
3,82
0,21
9,00
5,56
10,59
6,23
242,34
7,26
339,39
39,33
12,77
41,13
69,65
4,76
492,84
2029
129,80
4,01
0,22
9,46
5,84
11,13
6,55
254,62
7,63
356,60
41,32
13,42
43,21
77,15
5,00
522,52
2030
136,38
4,22
0,23
9,94
6,14
11,69
6,88
267,53
8,12
374,68
43,42
14,10
45,40
67,74
5,25
551,63
Months in Operation
Avg. Installed Capacity
Availability
Real Internal Consumption
Grid Losses
Average Internal Consumption
Average Availability
Expected Dispatch
Physical Guarantee
Net Physical Guarantee
Net FID
Energy Traded in ACR
Energy Traded in ACL
Spot energy sold in ACR
Total Energy Dispatch
Energy Demanded in ACR
Energy sold/(bought) in ACL
ADOMP
Unit
2015
months
12
MWm
176,00
%
92%
%
1%
%
3%
% - 60 months
1%
% - 60 months
96%
%
100%
MWm
101,80
MWm
98,70
MWm
1,53
MWm
98,00
MWm
-0,83
%
99%
MWh
1.414.045
MWh
1.355.167
MWh
(7.236)
MWh
1.433.533
2016
12
176,00
95%
1%
3%
1%
91%
100%
101,80
98,46
6,47
98,00
-6,02
100%
1.470.405
1.412.728
(52.854)
1.441.079
2017
12
176,00
90%
1%
3%
1%
90%
56%
101,80
98,26
7,21
98,00
-6,94
100%
767.882
739.218
(60.821)
800.989
2018
12
176,00
95%
1%
3%
1%
89%
32%
101,80
98,26
8,30
98,00
-8,04
100%
461.012
443.804
(70.390)
453.594
2019
12
176,00
95%
1%
3%
1%
89%
18%
101,80
98,26
8,12
98,00
-7,86
100%
264.519
254.645
(68.820)
260.396
2020
12
176,00
95%
1%
3%
1%
95%
18%
101,80
98,26
1,86
98,00
-1,59
100%
261.391
251.634
(13.972)
257.396
2021
12
176,00
95%
1%
3%
1%
97%
23%
101,80
98,26
0,37
98,00
-0,10
100%
331.900
319.511
(907)
326.995
15
2022
12
176,00
95%
1%
3%
1%
97%
32%
101,80
98,26
-0,39
98,00
0,65
100%
474.062
456.366
5.672
467.393
2023
12
176,00
95%
1%
3%
1%
99%
30%
101,80
98,26
-1,73
98,00
2,00
100%
437.842
421.498
17.494
431.994
2024
12
176,00
91%
1%
3%
1%
99%
30%
101,80
98,26
-1,73
98,00
2,00
100%
421.459
405.727
17.489
432.594
2025
12
176,00
95%
1%
3%
1%
98%
27%
101,80
98,26
-0,83
98,00
1,09
100%
389.967
375.410
9.571
385.195
2026
12
176,00
95%
1%
3%
1%
98%
30%
101,80
98,26
-0,72
98,00
0,98
100%
438.380
422.016
8.620
433.194
2027
12
176,00
94%
1%
3%
1%
98%
32%
101,80
98,26
-0,63
98,00
0,89
100%
462.380
445.120
7.789
457.194
2028
12
176,00
94%
1%
3%
1%
98%
30%
101,80
98,26
-0,62
98,00
0,88
100%
434.198
417.991
7.701
429.594
2029
12
176,00
94%
1%
3%
1%
98%
31%
101,80
98,26
-0,60
98,00
0,87
100%
456.353
439.318
7.578
451.794
2030
12
176,00
89%
1%
3%
1%
98%
28%
101,80
98,26
-1,33
98,00
1,60
100%
385.957
371.550
13.989
405.594
2016
2017
2018
260
2022
2023
2024
274
2025
331
2027
2028
356
349
2029
2030
213
207
2015
256
269
324
178
186
2019
2020
2021
2026
71
70
71
74
77
2015
2016
2017
2018
2019
Source: Eneva
83
2020
95
100
105
109
2022
2023
2024
2025
115
122
127
134
140
78
2021
16
2026
2027
2028
2029
2030
EBT
Income Tax Paid
Depreciation and Amortization
Changes in Working Capital
Other Non-Cash Items
Capex
Debt Raised
Debt Paid
Total
2015
50
(3)
6
8
0
(6)
0
(3)
53
2016
51
(3)
6
1
0
(0)
0
(14)
41
Discount Rate
Cost of Equity
Risk Free Rate
Unlevered Beta
Levered Beta
Risk Premium
Country Risk
Debt (Target)
Equity / (Debt + Equity)
Debt / (Debt + Equity)
Inflation
Brazil
USA
Cost of Capital
Ke - US$
Ke - R$ Nominal
Source: Eneva
2017
55
(3)
6
(2)
0
(0)
0
(14)
43
2018
60
(4)
6
(1)
0
0
0
4
65
2019
62
(6)
6
(1)
0
0
0
3
64
2020
69
(7)
6
(1)
0
0
0
(14)
53
2021
65
(7)
6
1
0
0
0
(14)
52
2022
84
(10)
6
(2)
0
0
0
(14)
65
2023
91
(11)
6
(1)
0
0
0
(14)
72
2024
97
(35)
6
(1)
0
0
0
(10)
58
2025
103
(37)
6
(1)
0
0
0
0
72
Source
8,34%
2,37%
0,33x
0,51x
6,96%
2,38%
2026
109
(39)
6
(0)
0
0
0
0
76
2027
116
(41)
6
(1)
0
0
0
0
80
2028
121
(43)
6
(1)
0
0
0
0
83
Date
12/03/2015
15/03/2015
15/03/2015
04/03/2015
8,34%
11,61%
17
16/03/2015
16/03/2015
2029
128
(46)
6
(1)
0
0
0
0
88
2030
134
(48)
6
(1)
0
0
0
0
92
Sources
Energy Source
Gas
56,3 MW
jan-14
Capacity Declared
53,4 MW
0 MWm
PPA Length
NA
Inflexibility
NA
NA
Fuel Consumption
7,57 MMBtu/MWh
Fuel Costs
7,52 R$/MMBtu
Yes same conditions
PPA Renovation
Economic Life
30 years
Financing Assumptions
Debt Amount (as of December, 2014)
R$153MM
Interest
104% CDI
Amortization Period
Amortization Start Year
Source: Eneva
Note[1]: Intercompany Debt ; Note [2]: Parnaba IV refers to UTE Parnaba IV and Parnaba Gerao e
Comercializao
18
8 years
2018
2015
38,95
2,24
0,12
4,94
4,10
4,39
7,71
0,00
3,93
10,27
148,06
8,61
0,00
0,00
1,32
314,07
2016
42,03
2,42
0,13
5,33
4,30
4,71
7,72
0,00
4,41
11,08
159,79
9,23
0,00
0,00
1,40
275,47
2017
44,40
2,56
0,14
5,63
4,55
4,99
4,95
0,00
4,76
11,70
168,79
9,78
0,00
0,00
1,48
260,43
2018
46,71
2,69
0,15
5,92
4,79
5,25
5,49
0,00
5,27
12,31
177,56
10,30
0,00
0,00
1,56
218,07
2019
49,07
2,83
0,16
6,22
5,03
5,52
5,08
0,00
5,19
12,94
186,57
10,82
0,00
0,00
1,64
201,63
2020
51,56
2,97
0,16
6,54
5,29
5,80
5,36
0,00
4,96
13,59
196,02
11,37
0,00
0,00
1,72
217,72
2021
54,18
3,12
0,17
6,87
5,56
6,09
6,05
0,00
5,37
14,28
205,96
11,95
0,00
0,00
1,81
223,05
2022
56,92
3,28
0,18
7,22
5,84
6,40
6,67
0,00
5,64
15,01
216,41
12,55
0,00
0,00
1,90
257,22
2023
59,81
3,44
0,19
7,58
6,14
6,72
6,95
0,00
5,90
15,77
227,38
13,19
0,00
0,00
2,00
275,91
2024
62,84
3,62
0,20
7,97
6,45
7,07
7,34
0,00
6,20
16,57
238,90
13,86
0,00
0,00
2,10
291,03
2025
66,03
3,80
0,21
8,37
6,77
7,42
7,72
0,00
6,45
17,41
251,02
14,56
0,00
0,00
2,21
296,68
2026
69,37
4,00
0,22
8,80
7,12
7,80
8,17
0,00
6,72
18,29
263,74
15,30
0,00
0,00
2,32
312,73
2027
72,89
4,20
0,23
9,24
7,48
8,20
8,63
0,00
7,00
19,22
277,12
16,07
0,00
0,00
2,44
340,10
2028
76,59
4,41
0,24
9,71
7,86
8,61
8,97
0,00
7,26
20,19
291,17
16,89
0,00
0,00
2,56
354,20
2029
80,47
4,63
0,26
10,20
8,26
9,05
9,35
0,00
7,63
21,22
305,93
17,75
0,00
0,00
2,69
381,83
2030
84,55
4,87
0,27
10,72
8,67
9,51
9,68
0,00
8,12
22,29
321,44
18,65
0,00
0,00
2,83
398,29
2023
12
56,28
87%
3%
3%
3%
88%
66%
51,78
45,48
-0,52
46,00
-1%
280.447
(4.545)
402.960
(3.080)
2024
12
56,28
89%
3%
3%
3%
87%
65%
51,78
45,21
-0,79
46,00
-2%
283.629
(6.940)
402.960
(4.644)
2025
12
56,28
85%
3%
3%
3%
87%
68%
51,78
45,16
-0,84
46,00
-2%
283.546
(7.329)
402.960
(5.108)
2026
12
56,28
87%
3%
3%
3%
86%
67%
51,78
44,87
-1,13
46,00
-2%
287.834
(9.895)
402.960
(6.850)
2027
12
56,28
87%
3%
3%
3%
87%
68%
51,78
44,90
-1,10
46,00
-2%
291.284
(9.666)
402.960
(6.778)
2028
12
56,28
87%
3%
3%
3%
87%
67%
51,78
45,05
-0,95
46,00
-2%
285.097
(8.312)
402.960
(5.707)
2029
12
56,28
87%
3%
3%
3%
87%
66%
51,78
45,08
-0,92
46,00
-2%
280.259
(8.058)
402.960
(5.447)
2030
12
56,28
87%
3%
3%
3%
87%
64%
51,78
44,88
-1,12
46,00
-2%
271.368
(9.826)
402.960
(6.439)
Months in Operation
Avg. Installed Capacity
Availability
Real Internal Consumption
Grid Losses
Average Internal Consumption
Average Availability
Expected Dispatch
Physical Guarantee
Net Physical Guarantee
Net FID
Energy Traded in ACL
Spot energy sold in ACR
Total Energy Dispatch
Energy Demanded in ACR
Energy sold/(bought) in ACL
ADOMP
Unit
months
MWm
%
%
%
% - 60 months
% - 60 months
%
MWm
MWm
MWm
MWm
%
MWh
MWh
MWh
MWh
2015
12
56,28
87%
3%
3%
3%
91%
100%
51,78
47,07
1,07
46,00
2%
428.489
9.345
402.960
9.637
2016
12
56,28
88%
3%
3%
3%
90%
100%
51,78
46,57
0,57
46,00
1%
432.762
5.011
402.960
5.168
2017
12
56,28
89%
3%
3%
3%
89%
81%
51,78
46,37
0,37
46,00
1%
355.301
3.198
402.960
2.676
2018
12
56,28
89%
3%
3%
3%
88%
65%
51,78
45,74
-0,26
46,00
-1%
287.336
(2.296)
402.960
(1.547)
2019
12
56,28
89%
3%
3%
3%
87%
49%
51,78
45,15
-0,85
46,00
-2%
216.722
(7.453)
402.960
(3.792)
2020
12
56,28
88%
3%
3%
3%
88%
50%
51,78
45,84
-0,16
46,00
0%
218.179
(1.378)
402.960
(715)
2021
12
56,28
87%
3%
3%
3%
89%
60%
51,78
45,95
-0,05
46,00
0%
257.247
(460)
402.960
(285)
19
2022
12
56,28
85%
3%
3%
3%
88%
68%
51,78
45,84
-0,16
46,00
0%
285.412
(1.419)
402.960
(992)
63
2015
72
74
77
68
2016
2017
2018
2019
91
95
99
82
87
2020
2021
2022
2023
2024
104
2025
109
2026
115
2027
121
2028
127
2029
133
2030
15
2015
Source: Eneva
23
24
2017
2018
27
29
29
30
31
32
2020
2021
2022
2023
2024
34
35
37
2025
2026
2027
39
41
44
17
2016
2019
20
2028
2029
2030
EBT
Income Tax Paid
Depreciation and Amortization
Changes in Working Capital
Other Non-Cash Items
Capex
Debt Raised
Debt Paid
Total
2015
(12)
0
7
6
0
(2)
0
0
-1
2017
(1)
0
7
(1)
0
(0)
0
(0)
5
2018
2
0
7
(0)
0
0
0
(18)
-10
2019
6
0
7
(0)
0
0
0
(18)
-6
2020
10
(0)
7
(0)
0
0
0
(16)
0
2021
12
(0)
7
(0)
0
0
0
(19)
0
2022
15
(0)
7
(0)
0
0
0
(21)
0
Discount Rate
Cost of Equity
Risk Free Rate
Unlevered Beta
Levered Beta
Risk Premium
Country Risk
24,34%
2,37%
0,33x
2,81x
6,96%
2,38%
Debt (Target)
Equity / (Debt + Equity)
Debt / (Debt + Equity)
Inflation
Brazil
USA
Cost of Capital
Ke - US$
Ke - R$ Nominal
Source: Eneva
2016
(7)
0
7
(0)
0
(0)
0
0
-1
2023
18
(1)
7
(0)
0
0
0
(24)
0
2024
22
(3)
7
(0)
0
0
0
(25)
0
2025
26
(8)
7
(0)
0
0
0
(12)
13
Source
US Treasury - 10 Years, Avg. Last Twelve Months
Comparables 2 Year Unlevered Beta
Ibbotson Yearbook 2014
EMBI + Brazil, Last Twelve Months
3,02%
5,07% Brazilian Central Bank Estimate
1,99% IMF Estimate
24,34%
28,10%
21
2026
29
(8)
7
(0)
0
0
0
(0)
27
2027
30
(9)
7
(0)
0
0
0
(0)
28
2028
33
(9)
7
(0)
0
0
0
(0)
30
Date
12/03/2015
15/03/2015
15/03/2015
04/03/2015
16/03/2015
16/03/2015
2029
35
(12)
7
(0)
0
0
0
0
29
2030
37
(15)
7
(0)
0
0
0
0
29
(93)
165
489
High range
425
Mid range
361
Low range
352
Parnaba I
Parnaba III
Parnaba IV
Total
Multiple Range
EV
Equity Value
8,00x
9,00x
713
803
489
578
396
485
6,50x
7,50x
558
643
333
419
240
326
8,00x
10,00x
713
892
489
667
396
574
Source: Eneva
Note [1]: Parnaba IV Projected Cash Flows discounted by Parnaba I Cost of Equity (13.08%) result in
an equity value of Petra stake of R$16,23 MM
22
Annex I
Multiples Database
Multiples Database
Comparable Trading Statistics
Company
March, 23rd/ 2015
EBITDA
2015
EV/EBITDA
2016
2015
2016
381
4,7
1.798,3
118,9
573,1
2.371,4
411,1
341,9
5,8x
6,9x
1.258
3,9
4.893,6
74,8
3.867,9
8.761,5
1.155,6
1.092,0
7,6x
8,0x
962
6,0
5.800,9
189,4
5.279,0
11.079,9
1.243,7
1.386,6
8,9x
8,0x
503
3,8
1.921,5
133,2
1.649,1
3.570,6
315,8
357,6
11,3x
10,0x
476
3,2
1.513,7
51,1
952,4
2.466,1
499,0
574,6
4,9x
4,3x
198
9,4
1.851,3
127,0
907,2
2.758,5
294,0
372,5
9,4x
7,4x
106
8,4
889,3
113,4
846,5
1.735,9
117,7
159,7
14,8x
10,9x
653
11,0
7.202,6
65,2
1.116,5
8.319,1
938,7
1.176,5
8,9x
7,1x
Eneva S.A.
840
0,1
50,4
241,6
1.973,4
2.023,8
326,6
0,0
6,2x
0,0x
Copel
274
10,8
2.961,9
35,1
1.826,6
4.471,0
892,6
1.057,4
Cemig S.A.
5,4x
5,3x
115,0
8,3x
6,8x
116,2
8,2x
7,2x
Source: Capital IQ
24
Multiples Database
Comparable Transaction Statistics
All Transactions
Announced Date
Buyers/Investors
Target/Issuer
Percent Sought
Im plied Enterprise
Value/EBITDA
Country of Target
6.611,0
54%
9,0x
Chile
413,0
39%
6,0x
Peru
12,0x
Chile
1.317,1
50%
Compaa General de
Electricidad S.A. (SNSE:CGE)
Generandes Peru SA
Empresa Electrica Guacolda
S.A.
NV Energy, Inc.
10.688,8
100%
8,9x
United States
69,4
100%
12,5x
Bulgaria
out-14
abr-14
mar-14
mai-13
dez-12
abr-11
DPL Inc.
4.798,7
100%
7,7x
United States
jan-11
26.627,3
100%
8,3x
United States
308,9
100%
7,4x
Sweeden
91,9
42%
5,0x
Barbados
9.291,0
100%
7,5x
United States
736,6
80%
7,2x
Australia
1.226,8
64%
7,5x
Colombia
2.769,0
100%
16,2x
Singapore
11.810,5
45%
11,0x
Spain
Average
5.482,8
77%
9,0x
Median
2.043,0
90%
8,0x
dez-10
nov-10
Emera Incorporated
fev-10
FirstEnergy Corp.
nov-09
out-09
set-08
jul-08
Source: Capital IQ
25
Annex II
Parnaba I, III and IV Overview
The Parnaba Complex, located in Santo Antnio dos Lopes, Maranho, is one of the largest thermal energy generation complexes in Brazil
The Complex is formed by the thermal power plants Parnaba I, Parnaba II, Parnaba III and Parnaba IV
Currently in operation, Parnaba I (676 MW), Parnaba III (178 MW) and Parnaba IV (56 MW) are the energy suppliers to the National Grid (SIN)
Using gas produced by Parnaba Gs Natural, ENEVA is able to generate energy at low costs due to privileged logistics, to the enterprises large scale
and easy access to mains
The Parnaba Complex is certified to reach up to 3,722 MW
Parnaba I
Parnaba III
Capacity: 676 MW
Capacity: 178 MW
Efficiency: 37%
Efficiency: 38%
Auction: A-5/2008
Auction: A-5/2008
Parnaba II
Parnaba IV
Capacity: 517 MW
Capacity: 56 MW
Efficiency: 51%
Efficiency: 46%
Auction: A-3/2011
Free Market
Source: Eneva
27
R$ thousand
2012
2013
2014
682.815
960.759
(594.048)
(824.570)
88.767
136.190
(15.736)
(11.997)
(18.770)
(14.807)
(10.320)
(5.844)
(929)
(1.677)
(12.926)
(15.736)
76.771
117.420
(984)
(71.334)
(75.854)
Financial revenues
3.100
6.010
Financial expenses
(985)
(74.434)
(81.864)
(16.720)
5.436
41.566
5.716
(5.284)
(5.604)
(11.004)
152
35.962
Net Revenues
Costs
Gross profit
Operating Expenses
SG&A
Other expenses
EBIT
Net financial revenues (expenses)
EBT
Taxes
Net income (loss)
Source: Eneva
28
2012
2013
2014
85.229
158.288
206.355
83.250
32.034
38.121
Suppliers
Accounts receivable
110.113
141.072
Inventory
4.236
7.480
Taxes recoverable
7.455
14.722
Prepaid expenses
1.706
4.086
4.960
272
364
1.084.889
1.264.731
1.179.035
5.141
520
1.323
Current Assets
Cash and cash equivalents
Other credits
R$ thousand
2012
2013
2014
162.381
265.826
199.312
3.020
85.787
30.028
150.759
149.663
142.438
413
9.431
6.603
5.157
2.328
2.252
Energy reimbursement
15.739
3.032
2.878
17.991
677.593
910.569
715.373
677.593
657.588
577.981
4.187
7.117
107.223
130.275
141.571
330.144
246.624
470.705
Current Liabilities
11.359
Prepaid expenses
1.844
257
1.356
Linked deposit
34.044
24.648
Related parties
1.906
1.344
Fixed assets
882.788
1.035.111
971.709
Capital
354.465
263.619
263.619
Intangible
183.758
178.887
166.647
Accumulated losses
(24.321)
(16.995)
207.087
Total Assets
1.170.118
1.423.019
1.385.390
1.170.118
1.423.019
1.385.390
Source: Eneva
14.006
12.009
Equity
29
R$ thousand
2012
2013
2014
198.299
244.861
(221.912)
(239.403)
(23.613)
5.458
(294)
(483)
(10.070)
(294)
(483)
(10.070)
(294)
(24.096)
(4.612)
(4.790)
(10.660)
Financial revenues
3.811
9.021
Financial expenses
(8.601)
(19.681)
(294)
(28.886)
(15.272)
9.821
5.109
(294)
(19.065)
(10.163)
Net Revenues
Costs
Gross profit
Operating Expenses
Administrative
EBIT
Net financial revenues (expenses)
EBT
Taxes
Net income (loss)
Source: Eneva
30
2012
2013
2014
67
162.075
71.320
62.796
14.104
Suppliers
Accounts receivable
83.494
42.230
Taxes recoverable
10.528
Prepaid expenses
67
Derivative transactions
Other credits
2012
2013
2014
13
149.710
164.106
13
28.253
33.716
120.636
121.568
9.873
39
1.269
1.157
549
1.380
233
8.822
2.609
3.956
38.591
38.001
166.267
267.864
38.591
38.001
Taxes recoverable
249
111
47
140.040
137.077
9.821
86.218
Capital
1.213
160.271
160.271
Fixed assets
156.197
181.535
Accumulated losses
(1.166)
(20.231)
(23.194)
67
328.341
339.184
67
328.341
339.184
Current Assets
Total Assets
Source: Eneva
R$ thousand
Current Liabilities
31
R$ thousand
2012
2013
2014
5.825
50.022
(3.244)
(32.549)
2.581
17.473
(632)
(1.311)
(632)
(1.311)
1.949
16.162
12
3.416
(21.280)
Financial revenues
19
8.928
325
Financial expenses
(7)
(5.512)
(21.605)
(12)
5.365
(5.118)
(1.800)
2.783
(12)
3.565
(2.335)
Net Revenues
Costs
Gross profit
Operating Expenses
Administrative
EBIT
Net financial revenues (expenses)
EBT
Taxes
Net income (loss)
Source: Eneva
32
2012
2013
2014
Current Assets
1.596
29.035
14.270
Accounts receivable
1.596
5.074
331
8.999
2.412
R$ thousand
2012
2013
2014
Current Liabilities
1.532
83.602
5.658
Suppliers
7.888
1.797
Labour obligations
129
73
23
437
3.718
75.131
1.509
17
70
44.271
174.877
1.048
1.580
43.223
173.297
15.228
19.514
17.178
15.216
15.936
15.936
12
3.578
1.242
16.760
147.387
197.713
Tax obligations
Loans and financing
Taxes recoverable
11.755
10.698
Derivative transactions
3.105
Other credits
102
829
Taxes recoverable
Fixed assets
15.164
118.352
183.443
74
22.200
15.161
118.278
161.243
Equity
Capital
Earnings reserve
Total Assets
Source: Eneva
16.760
147.387
197.713
33
Contacts
Corrado Varoli
cvaroli@g5evercore.com
+55 11 3014 6868
Marcelo Lajchter
malajchter@g5evercore.com
+55 21 3205 9180
Arthur Horta
ahorta@g5evercore.com
+55 11 3165 4600
Graciema Bertoletti
graciema.bertoletti@g5evercore.com
+55 11 3014 6846
Sao Paulo
Rio de Janeiro
www.g5evercore.com
34
Attachment V
Petra Assets Valuation Report
Eneva
Valuation
Analysis MEMORANDUM
PROJECT
36 INFORMATION
PREPARED
[INVESTOR]
March
31,TO:
2015
DATE: [X]
Table of Contents
Section I.
Executive Summary
Section II.
Appendix I.
Multiple Database
Appendix II.
Contacts
I
Executive Summary
Executive Summary
Introduction (1/2)
Eneva S.A
Praia do Flamengo, 66 9th floor
22210030 Rio de Janeiro RJ Brazil
Dear Sirs,
We understand that Eneva S.A. (Company or Eneva) is entertaining the possibility of acquiring the stake currently owned directly and/or indirectly
by Petra Energia S.A. (Petra) in UTE Parnaba I, UTE Parnaba III and UTE Parnaba IV1 (collectively referred to herein as UTEs), equivalent to
30% of the capital stock in each of such UTEs (Petra UTE Shares).
For the purposes of the foregoing, Eneva have asked G5 Consultoria e Assessoria Ltda. (G5 Evercore) to provide the Company with a valuation of
Petra UTE Shares.
In connection with the required analysis by G5 Evercore, please be advised that we have based our work on the information provided by or on
behalf of the Company and also endeavored the following specific reviews and discussions:
I.
Reviewed certain non-public internal financial statements, other non-public financial and operating data relating to Parnaba I, III and IV,
that were prepared and provided to us by the management of the Company;
II.
Reviewed certain financial projections relating to Parnaba I, III and IV, that were provided to us by the management of the Company;
III.
Discussed the past and current operations, financial projections, current financial condition and prospects of Parnaba I, III and IV with
certain members of senior management of the Company;
IV. Reviewed existing agreement between Petra and Eneva related to Parnaba I, III and IV, including existing shareholders agreements
and capital increase operations that occurred in the past;
V.
Reviewed the financial terms of certain publicly available transactions that we deemed to be relevant; and
VI. Discussed with management of the Company, but have not discussed with legal advisors of the Company, the potential impact of
certain ongoing litigations.
With respect to the financial projections of Parnaba I, III and IV which were provided to us, we have assumed that such financial projections have
been reasonably prepared by the Company on bases reflecting the best currently available estimates and good faith judgments of the future
competitive, operating and regulatory environments and related financial performance of Parnaba I, III and IV.
Furthermore, we were informed by the Company that Petra failed to contribute its share on capital increases of UTE Parnaba I, UTE Parnaba III
and UTE Parnaba IV duly approved in the past years. The amount due by Petra, sums R$ 70,9 MM, however, with penalties and interests applied,
the current total amount outstanding is R$ 93,0 MM.
Note [1]: UTE Parnaba IV refers to UTE Parnaba IV and Parnaba Gerao e Comercializao
Executive Summary
Introduction (2/2)
Notwithstanding our review of certain set of information provided by or on behalf of the Company, we have not made, nor assumed any
responsibility for making, any technical audit of the Companys operation nor carried out any independent valuation or appraisal of specific assets or
liabilities (contingent or otherwise) of the UTEs, nor have we been provided with any such appraisals, nor have we evaluated the solvency or fair
value of each of the UTEs under any state or federal laws relating to bankruptcy, insolvency or similar matters. Our valuation analysis is necessarily
based on economic, market and other conditions as in effect on, and the information made available to us as of, the date hereof. It is understood
that subsequent developments may affect this analysis and that we do not have any obligation to update, revise or reaffirm this assessment.
Likewise, we have not been asked to pass upon, nor express opinion with respect to any matter other than the valuation of the UTEs as of the date
hereof, to the holders of the Company. Our valuation analysis does not address the relative merits of the acquisition of Petra UTE Shares as
compared to other business or financial strategies that might be available to the Company, nor does it address the underlying business decision of
the Company to engage in such a transaction. We are not legal, regulatory, accounting or tax experts and have assumed the accuracy and
completeness of assessments by the Company and its advisors with respect to legal, regulatory, accounting and tax matters.
Furthermore, no representation or warranty, express or implied, is hereby made by G5 Evercore and/or its affiliates, managers, employees,
consultants, agents or representatives, as to the accuracy or completeness of the information provided to G5 Evercore and nothing contained herein
is, or shall be relied upon as, a representation, whether as to the past, the present or the future.
Finally, please be also advised that we have been engaged as financial advisor to the Company solely for the purpose of performing this valuation
analysis and will receive a fee in connection with the delivery of this analysis. In addition, the Company has agreed to reimburse certain of our
expenses and to indemnify us against certain liabilities arising out of our engagement. In addition, we and our affiliates may have in the past
provided, may be currently providing and in the future may provide, financial advisory services to the Company, or their respective affiliates, for
which we have received, and would expect to receive, compensation.
Based upon and subject to the foregoing, as of the date hereof, we present in this presentation a summary of the valuation analysis of Petra UTE
Shares.
Executive Summary
Parnaba I, Parnaba III e Parnaba IV Valuation Summary
Petras stake in Parnaba I, Parnaba III and Parnaba IV equity were valued by G5 Evercore according to different methodologies, detailed
below.
Valuation Methodologies
Methodology
Range
-15% / +15%
489
Cost of Capital:
Parnaba I
13,08%
Parnaba III
11,61%
Parnaba IV
28,10%
361
485
Trading EV/EBITDA Multiples
2015
396
8,0x 9,0x
326
6,5x 7,5x
Transaction EV/EBITDA
Multiples
8,0x 10,0x
Note [1]: Discounted by R$ 93 MM owed by Petra under the shareholders agreement regulation, due
to failure in contribution its share in capital increases occurred in the past
240
574
396
II
Valuation - Parnaba I, III and IV
E.ON
Petra
42,9%
Parnaba I
Parnaba III
Parnaba IV
50,0%
ENEVA / E.ON
Joint Venture (JV)
Parnaba I
70% Eneva
30% Petra
35% Eneva
Parnaba III
35% JV
30% Petra
35% Eneva
Parnaba IV
35% JV
30% Petra
Base Date
Source: Eneva
50,0%
Valuation - Eneva
Cost of Equity Calculation Methodology
CAPM Model
Cost of Equity
(Nominal R$)
Cost of Equity
Cost of Equity
Risk Free Rate
Inflation
Differential
(Nominal USD)
Levered Beta
Market Risk Premium
Country Risk
Unlevered Beta
Levered Beta
Risk Premium
Debt to Equity
Ratio
Country Risk
Long-Term
Long-Term
US Inflation
Brazil Inflation
Overview
Energy Source
Gas
675,2 MW
feb-13
Capacity Declared
660,0 MW
450 MWm
PPA Length
15 years
Inflexibility
0%
112,50 R$/MWh
Fuel Consumption
10,89 MMBtu/MWh
Fuel Costs
PPA Renovation
Economic Life
30 years
Financing Assumptions
Debt Amount (as of December, 2014)
Interest
Amortization Period
Amortization Start Year
Source: Eneva
6,10 R$/MMBtu
10
R$720MM
69% of Debt: TJLP + 2%
31% of Debt : IPCA + 5%
13 years
2015
Unit
R$/MWh
R$/KW - year
R$/KW - year
R$/KW - month
R$ MM
R$/MWh
R$ MM
R$/MWh
US$/MMBtu
R$/MWh
R$/MWh
R$/MMBtu
R$ MM
R$ MM
R$ MM
R$/MWh
2015
44,39
1,95
0,11
3,31
48,82
5,55
12,47
121,13
3,93
10,97
20,00
6,49
169,86
220,41
9,89
333,39
2016
47,47
2,09
0,12
3,54
47,72
5,99
12,91
130,06
4,41
11,77
21,58
7,01
183,31
233,95
10,52
305,51
2017
50,36
2,21
0,12
3,75
50,41
6,32
183,50
137,71
4,76
12,47
22,80
7,40
193,63
220,59
11,11
285,89
2018
53,01
2,33
0,13
3,95
53,03
6,65
13,74
144,92
5,27
13,12
23,98
7,79
203,70
176,91
11,69
258,05
2019
55,71
2,45
0,14
4,15
55,72
6,99
14,45
152,30
5,19
13,79
25,20
8,18
214,03
100,99
12,28
258,60
2020
58,54
2,57
0,14
4,36
58,55
7,35
15,19
160,02
4,96
14,49
26,48
8,60
224,88
91,87
12,91
274,07
2021
61,51
2,70
0,15
4,58
61,51
7,72
15,96
168,13
5,37
15,22
27,82
9,03
236,28
161,63
13,56
260,22
2022
64,63
2,84
0,16
4,81
64,63
8,11
16,76
176,65
5,64
15,99
29,23
9,49
248,26
217,91
14,25
299,96
2023
67,90
2,98
0,17
5,06
67,91
8,52
17,61
185,61
5,90
16,80
30,71
9,97
260,85
238,04
14,97
319,89
2024
71,34
3,13
0,17
5,31
71,35
8,95
39,92
195,02
6,20
17,65
32,27
10,48
274,07
239,58
15,73
343,79
2025
74,96
3,29
0,18
5,58
74,97
9,41
19,45
204,91
6,45
18,55
33,91
11,01
287,97
303,29
16,53
339,32
2026
78,76
3,46
0,19
5,87
78,77
9,88
20,43
215,30
6,72
19,49
35,63
11,57
302,57
339,06
17,36
352,93
2027
82,76
3,64
0,20
6,16
82,77
10,38
21,47
226,21
7,00
20,48
37,43
12,16
317,91
339,10
18,25
410,62
2028
86,95
3,82
0,21
6,48
86,96
10,91
22,56
237,68
7,26
21,52
39,33
12,77
334,03
343,18
19,17
425,90
2029
91,36
4,01
0,22
6,81
91,37
11,46
23,70
249,73
7,63
22,61
41,32
13,42
350,96
404,50
20,14
455,78
2030
95,99
4,22
0,23
7,15
96,00
12,04
24,90
262,39
8,12
23,75
43,42
14,10
368,76
446,75
21,16
472,56
Months in Operation
Avg. Installed Capacity
Availability
Real Internal Consumption
Grid Losses
Average Internal Consumption
Average Availability
Expected Dispatch
Physical Guarantee
Net Physical Guarantee
Net FID
Energy Traded in ACR
Energy Traded in ACL
Spot energy sold in ACR
Total Energy Dispatch
Energy Demanded in ACR
Energy sold/(bought) in ACL
ADOMP
Unit
2015
months
12
MWm
675,20
%
88%
%
1%
%
3%
% - 60 months
1%
% - 60 months
97%
%
100%
MWm
466,60
MWm
451,67
MWm
0,00
MWm
450,00
MWm
1,67
%
100%
MWh
5.231.601
MWh
5.024.485
MWh
14.661
MWh
5.387.239
2016
12
675,20
90%
1%
3%
1%
92%
100%
466,60
451,28
21,48
450,00
-20,21
100%
5.316.456
5.110.490
(177.497)
5.406.770
2017
12
675,20
95%
1%
3%
1%
91%
69%
466,60
450,94
28,84
450,00
-27,90
100%
3.863.196
3.716.285
(244.373)
3.711.995
2018
12
675,20
95%
1%
3%
1%
91%
46%
466,60
450,37
29,26
450,00
-28,89
100%
2.585.286
2.490.137
(253.115)
2.489.819
2019
12
675,20
95%
1%
3%
1%
91%
28%
466,60
449,79
26,71
450,00
-26,92
100%
1.591.026
1.533.721
(235.807)
1.534.314
2020
12
675,20
91%
1%
3%
1%
94%
30%
466,60
449,79
13,32
450,00
-13,53
100%
1.629.928
1.571.222
(118.504)
1.635.701
2021
12
675,20
95%
1%
3%
1%
95%
40%
466,60
449,79
7,56
450,00
-7,77
100%
2.260.623
2.179.201
(68.051)
2.183.187
11
2022
12
675,20
95%
1%
3%
1%
97%
48%
466,60
449,79
-0,05
450,00
-0,16
100%
2.676.014
2.579.630
(1.399)
2.586.480
2023
12
675,20
94%
1%
3%
1%
97%
47%
466,60
449,79
-0,87
450,00
0,66
100%
2.635.725
2.540.793
5.804
2.550.431
2024
12
675,20
89%
1%
3%
1%
97%
45%
466,60
449,79
-0,65
450,00
0,45
100%
2.385.555
2.299.633
3.931
2.451.298
2025
12
675,20
94%
1%
3%
1%
96%
49%
466,60
449,79
5,53
450,00
-5,74
100%
2.738.302
2.639.675
(50.250)
2.654.071
2026
12
675,20
95%
1%
3%
1%
96%
50%
466,60
449,79
3,14
450,00
-3,34
100%
2.783.776
2.683.512
(29.284)
2.687.866
2027
12
675,20
95%
1%
3%
1%
96%
46%
466,60
449,79
3,59
450,00
-3,80
100%
2.553.484
2.461.514
(33.252)
2.469.322
2028
12
675,20
91%
1%
3%
1%
96%
44%
466,60
449,79
3,50
450,00
-3,71
100%
2.387.363
2.301.376
(32.479)
2.403.984
2029
12
675,20
94%
1%
3%
1%
96%
45%
466,60
449,79
6,86
450,00
-7,07
100%
2.519.274
2.428.536
(61.891)
2.442.286
2030
12
675,20
94%
1%
3%
1%
97%
44%
466,60
449,79
1,69
450,00
-1,90
100%
2.449.088
2.360.878
(16.628)
2.376.948
1.479
1.095
2015
1.221
2016
1.126
2017
989
2018
1.065
849
881
2019
2020
2021
1.219
1.286
1.311
2022
2023
2024
2025
1.582
1.610
1.652
2026
2027
2028
1.806
2029
1.910
2030
356
211
236
245
261
2018
2019
2020
283
305
322
317
2022
2023
2024
377
394
413
436
463
199
62
2015
Source: Eneva
2016
2017
2021
12
2025
2026
2027
2028
2029
2030
EBT
Income Tax Paid
Depreciation and Amortization
Changes in Working Capital
Other Non-Cash Items
Capex
Debt Raised
Debt Paid
Total
2015
99
(2)
46
(4)
0
(13)
0
(57)
70
2016
97
(2)
46
3
0
(2)
0
(57)
86
Discount Rate
Cost of Equity
Risk Free Rate
Unlevered Beta
Levered Beta
Risk Premium
Country Risk
Debt (Target)
Equity / (Debt + Equity)
Debt / (Debt + Equity)
Inflation
Brazil
USA
Cost of Capital
Ke - US$
Ke - R$ Nominal
Source: Eneva
2017
(34)
0
46
17
0
(1)
0
(57)
-28
2018
145
(5)
46
(26)
0
(0)
0
(57)
103
2019
158
(6)
47
(3)
0
(0)
0
(57)
138
2020
179
(7)
47
(2)
0
0
0
(57)
159
2021
206
(9)
47
(1)
0
0
0
(57)
186
2022
232
(14)
47
(1)
0
0
0
(57)
207
2023
254
(17)
47
(1)
0
0
0
(57)
225
2024
254
(102)
47
1
0
0
0
(57)
143
2025
297
(117)
47
(3)
0
0
0
(57)
167
Source
9,76%
2,37%
0,33x
0,72x
6,96%
2,38%
2026
323
(126)
47
(2)
0
0
0
(57)
185
2027
345
(133)
47
(2)
0
0
0
(33)
223
2028
366
(140)
47
(2)
0
0
0
0
270
Date
12/03/2015
15/03/2015
15/03/2015
04/03/2015
9,76%
13,08%
13
16/03/2015
16/03/2015
2029
389
(148)
47
(1)
0
0
0
0
286
2030
417
(158)
47
(2)
0
0
0
0
303
Sources
Energy Source
Gas
176,0 MW
out-13
Capacity Declared
176,0 MW
98 MWm
PPA Length
15 years
Inflexibility
0%
114,71 R$/MWh
Fuel Consumption
8,84 MMBtu/MWh
Fuel Costs
Economic Life
R$122MM
Interest
CDI + 3%
Amortization Period
10 years
Net Intercompany Credit, as of December 2014, of R$ 34MM is not considered in the total
debt amount
30 years
Financing Assumptions
PPA Renovation
Source: Eneva
6,10 R$/MMBtu
14
2015
Unit
R$/MWh
R$/KW - year
R$/KW - year
R$/KW - month
R$ MM
R$/MWh
R$ MM
R$/MWh
US$/MMBtu
R$/MWh
R$/MWh
R$/MMBtu
R$ MM
R$ MM
R$ MM
R$/MWh
2015
63,06
1,95
0,11
4,60
2,88
5,38
3,45
123,50
3,93
172,96
20,00
6,48
20,91
123,18
2,45
346,32
2016
67,45
2,09
0,12
4,92
3,05
5,81
3,57
132,61
4,41
185,71
21,58
6,87
22,57
137,80
2,61
325,59
2017
71,54
2,21
0,12
5,21
3,22
6,14
3,64
140,40
4,76
196,63
22,80
7,40
23,84
73,71
2,76
315,02
2018
75,31
2,33
0,13
5,49
3,39
6,46
3,80
147,76
5,27
206,94
23,98
7,79
25,08
45,37
2,90
297,91
2019
79,15
2,45
0,14
5,77
3,56
6,78
3,99
155,28
5,19
217,47
25,20
8,18
26,35
26,05
3,05
305,16
2020
83,17
2,57
0,14
6,06
3,75
7,13
4,20
163,15
4,96
228,49
26,48
8,60
27,69
27,02
3,20
340,09
2021
87,38
2,70
0,15
6,37
3,93
7,49
16,78
171,42
5,37
240,08
27,82
9,03
29,09
36,91
3,37
307,78
2022
91,81
2,84
0,16
6,69
4,13
7,87
4,63
180,11
5,64
252,25
29,23
9,49
30,57
56,91
3,54
340,61
2023
96,47
2,98
0,17
7,03
4,34
8,27
4,87
189,24
5,90
265,04
30,71
9,97
32,12
54,94
3,72
373,10
2024
101,36
3,13
0,17
7,39
4,56
8,69
5,12
198,84
6,20
278,47
32,27
10,48
33,74
55,41
3,90
396,20
2025
106,50
3,29
0,18
7,76
4,80
9,13
5,37
208,92
6,45
292,59
33,91
11,01
35,46
53,54
4,10
410,84
2026
111,90
3,46
0,19
8,16
5,04
9,59
5,65
219,51
6,72
307,43
35,63
11,57
37,25
63,74
4,31
408,40
2027
117,57
3,64
0,20
8,57
5,29
10,08
5,93
230,64
7,00
323,01
37,43
12,16
39,14
70,90
4,53
463,75
2028
123,53
3,82
0,21
9,00
5,56
10,59
6,23
242,34
7,26
339,39
39,33
12,77
41,13
69,65
4,76
492,84
2029
129,80
4,01
0,22
9,46
5,84
11,13
6,55
254,62
7,63
356,60
41,32
13,42
43,21
77,15
5,00
522,52
2030
136,38
4,22
0,23
9,94
6,14
11,69
6,88
267,53
8,12
374,68
43,42
14,10
45,40
67,74
5,25
551,63
Months in Operation
Avg. Installed Capacity
Availability
Real Internal Consumption
Grid Losses
Average Internal Consumption
Average Availability
Expected Dispatch
Physical Guarantee
Net Physical Guarantee
Net FID
Energy Traded in ACR
Energy Traded in ACL
Spot energy sold in ACR
Total Energy Dispatch
Energy Demanded in ACR
Energy sold/(bought) in ACL
ADOMP
Unit
2015
months
12
MWm
176,00
%
92%
%
1%
%
3%
% - 60 months
1%
% - 60 months
96%
%
100%
MWm
101,80
MWm
98,70
MWm
1,53
MWm
98,00
MWm
-0,83
%
99%
MWh
1.414.045
MWh
1.355.167
MWh
(7.236)
MWh
1.433.533
2016
12
176,00
95%
1%
3%
1%
91%
100%
101,80
98,46
6,47
98,00
-6,02
100%
1.470.405
1.412.728
(52.854)
1.441.079
2017
12
176,00
90%
1%
3%
1%
90%
56%
101,80
98,26
7,21
98,00
-6,94
100%
767.882
739.218
(60.821)
800.989
2018
12
176,00
95%
1%
3%
1%
89%
32%
101,80
98,26
8,30
98,00
-8,04
100%
461.012
443.804
(70.390)
453.594
2019
12
176,00
95%
1%
3%
1%
89%
18%
101,80
98,26
8,12
98,00
-7,86
100%
264.519
254.645
(68.820)
260.396
2020
12
176,00
95%
1%
3%
1%
95%
18%
101,80
98,26
1,86
98,00
-1,59
100%
261.391
251.634
(13.972)
257.396
2021
12
176,00
95%
1%
3%
1%
97%
23%
101,80
98,26
0,37
98,00
-0,10
100%
331.900
319.511
(907)
326.995
15
2022
12
176,00
95%
1%
3%
1%
97%
32%
101,80
98,26
-0,39
98,00
0,65
100%
474.062
456.366
5.672
467.393
2023
12
176,00
95%
1%
3%
1%
99%
30%
101,80
98,26
-1,73
98,00
2,00
100%
437.842
421.498
17.494
431.994
2024
12
176,00
91%
1%
3%
1%
99%
30%
101,80
98,26
-1,73
98,00
2,00
100%
421.459
405.727
17.489
432.594
2025
12
176,00
95%
1%
3%
1%
98%
27%
101,80
98,26
-0,83
98,00
1,09
100%
389.967
375.410
9.571
385.195
2026
12
176,00
95%
1%
3%
1%
98%
30%
101,80
98,26
-0,72
98,00
0,98
100%
438.380
422.016
8.620
433.194
2027
12
176,00
94%
1%
3%
1%
98%
32%
101,80
98,26
-0,63
98,00
0,89
100%
462.380
445.120
7.789
457.194
2028
12
176,00
94%
1%
3%
1%
98%
30%
101,80
98,26
-0,62
98,00
0,88
100%
434.198
417.991
7.701
429.594
2029
12
176,00
94%
1%
3%
1%
98%
31%
101,80
98,26
-0,60
98,00
0,87
100%
456.353
439.318
7.578
451.794
2030
12
176,00
89%
1%
3%
1%
98%
28%
101,80
98,26
-1,33
98,00
1,60
100%
385.957
371.550
13.989
405.594
2016
2017
2018
260
2022
2023
2024
274
2025
331
2027
2028
356
349
2029
2030
213
207
2015
256
269
324
178
186
2019
2020
2021
2026
71
70
71
74
77
2015
2016
2017
2018
2019
Source: Eneva
83
2020
95
100
105
109
2022
2023
2024
2025
115
122
127
134
140
78
2021
16
2026
2027
2028
2029
2030
EBT
Income Tax Paid
Depreciation and Amortization
Changes in Working Capital
Other Non-Cash Items
Capex
Debt Raised
Debt Paid
Total
2015
50
(3)
6
8
0
(6)
0
(3)
53
2016
51
(3)
6
1
0
(0)
0
(14)
41
Discount Rate
Cost of Equity
Risk Free Rate
Unlevered Beta
Levered Beta
Risk Premium
Country Risk
Debt (Target)
Equity / (Debt + Equity)
Debt / (Debt + Equity)
Inflation
Brazil
USA
Cost of Capital
Ke - US$
Ke - R$ Nominal
Source: Eneva
2017
55
(3)
6
(2)
0
(0)
0
(14)
43
2018
60
(4)
6
(1)
0
0
0
4
65
2019
62
(6)
6
(1)
0
0
0
3
64
2020
69
(7)
6
(1)
0
0
0
(14)
53
2021
65
(7)
6
1
0
0
0
(14)
52
2022
84
(10)
6
(2)
0
0
0
(14)
65
2023
91
(11)
6
(1)
0
0
0
(14)
72
2024
97
(35)
6
(1)
0
0
0
(10)
58
2025
103
(37)
6
(1)
0
0
0
0
72
Source
8,34%
2,37%
0,33x
0,51x
6,96%
2,38%
2026
109
(39)
6
(0)
0
0
0
0
76
2027
116
(41)
6
(1)
0
0
0
0
80
2028
121
(43)
6
(1)
0
0
0
0
83
Date
12/03/2015
15/03/2015
15/03/2015
04/03/2015
8,34%
11,61%
17
16/03/2015
16/03/2015
2029
128
(46)
6
(1)
0
0
0
0
88
2030
134
(48)
6
(1)
0
0
0
0
92
Sources
Energy Source
Gas
56,3 MW
jan-14
Capacity Declared
53,4 MW
0 MWm
PPA Length
NA
Inflexibility
NA
NA
Fuel Consumption
7,57 MMBtu/MWh
Fuel Costs
7,52 R$/MMBtu
Yes same conditions
PPA Renovation
Economic Life
30 years
Financing Assumptions
Debt Amount (as of December, 2014)
R$153MM
Interest
104% CDI
Amortization Period
Amortization Start Year
Source: Eneva
Note[1]: Intercompany Debt ; Note [2]: Parnaba IV refers to UTE Parnaba IV and Parnaba Gerao e
Comercializao
18
8 years
2018
2015
38,95
2,24
0,12
4,94
4,10
4,39
7,71
0,00
3,93
10,27
148,06
8,61
0,00
0,00
1,32
314,07
2016
42,03
2,42
0,13
5,33
4,30
4,71
7,72
0,00
4,41
11,08
159,79
9,23
0,00
0,00
1,40
275,47
2017
44,40
2,56
0,14
5,63
4,55
4,99
4,95
0,00
4,76
11,70
168,79
9,78
0,00
0,00
1,48
260,43
2018
46,71
2,69
0,15
5,92
4,79
5,25
5,49
0,00
5,27
12,31
177,56
10,30
0,00
0,00
1,56
218,07
2019
49,07
2,83
0,16
6,22
5,03
5,52
5,08
0,00
5,19
12,94
186,57
10,82
0,00
0,00
1,64
201,63
2020
51,56
2,97
0,16
6,54
5,29
5,80
5,36
0,00
4,96
13,59
196,02
11,37
0,00
0,00
1,72
217,72
2021
54,18
3,12
0,17
6,87
5,56
6,09
6,05
0,00
5,37
14,28
205,96
11,95
0,00
0,00
1,81
223,05
2022
56,92
3,28
0,18
7,22
5,84
6,40
6,67
0,00
5,64
15,01
216,41
12,55
0,00
0,00
1,90
257,22
2023
59,81
3,44
0,19
7,58
6,14
6,72
6,95
0,00
5,90
15,77
227,38
13,19
0,00
0,00
2,00
275,91
2024
62,84
3,62
0,20
7,97
6,45
7,07
7,34
0,00
6,20
16,57
238,90
13,86
0,00
0,00
2,10
291,03
2025
66,03
3,80
0,21
8,37
6,77
7,42
7,72
0,00
6,45
17,41
251,02
14,56
0,00
0,00
2,21
296,68
2026
69,37
4,00
0,22
8,80
7,12
7,80
8,17
0,00
6,72
18,29
263,74
15,30
0,00
0,00
2,32
312,73
2027
72,89
4,20
0,23
9,24
7,48
8,20
8,63
0,00
7,00
19,22
277,12
16,07
0,00
0,00
2,44
340,10
2028
76,59
4,41
0,24
9,71
7,86
8,61
8,97
0,00
7,26
20,19
291,17
16,89
0,00
0,00
2,56
354,20
2029
80,47
4,63
0,26
10,20
8,26
9,05
9,35
0,00
7,63
21,22
305,93
17,75
0,00
0,00
2,69
381,83
2030
84,55
4,87
0,27
10,72
8,67
9,51
9,68
0,00
8,12
22,29
321,44
18,65
0,00
0,00
2,83
398,29
2023
12
56,28
87%
3%
3%
3%
88%
66%
51,78
45,48
-0,52
46,00
-1%
280.447
(4.545)
402.960
(3.080)
2024
12
56,28
89%
3%
3%
3%
87%
65%
51,78
45,21
-0,79
46,00
-2%
283.629
(6.940)
402.960
(4.644)
2025
12
56,28
85%
3%
3%
3%
87%
68%
51,78
45,16
-0,84
46,00
-2%
283.546
(7.329)
402.960
(5.108)
2026
12
56,28
87%
3%
3%
3%
86%
67%
51,78
44,87
-1,13
46,00
-2%
287.834
(9.895)
402.960
(6.850)
2027
12
56,28
87%
3%
3%
3%
87%
68%
51,78
44,90
-1,10
46,00
-2%
291.284
(9.666)
402.960
(6.778)
2028
12
56,28
87%
3%
3%
3%
87%
67%
51,78
45,05
-0,95
46,00
-2%
285.097
(8.312)
402.960
(5.707)
2029
12
56,28
87%
3%
3%
3%
87%
66%
51,78
45,08
-0,92
46,00
-2%
280.259
(8.058)
402.960
(5.447)
2030
12
56,28
87%
3%
3%
3%
87%
64%
51,78
44,88
-1,12
46,00
-2%
271.368
(9.826)
402.960
(6.439)
Months in Operation
Avg. Installed Capacity
Availability
Real Internal Consumption
Grid Losses
Average Internal Consumption
Average Availability
Expected Dispatch
Physical Guarantee
Net Physical Guarantee
Net FID
Energy Traded in ACL
Spot energy sold in ACR
Total Energy Dispatch
Energy Demanded in ACR
Energy sold/(bought) in ACL
ADOMP
Unit
months
MWm
%
%
%
% - 60 months
% - 60 months
%
MWm
MWm
MWm
MWm
%
MWh
MWh
MWh
MWh
2015
12
56,28
87%
3%
3%
3%
91%
100%
51,78
47,07
1,07
46,00
2%
428.489
9.345
402.960
9.637
2016
12
56,28
88%
3%
3%
3%
90%
100%
51,78
46,57
0,57
46,00
1%
432.762
5.011
402.960
5.168
2017
12
56,28
89%
3%
3%
3%
89%
81%
51,78
46,37
0,37
46,00
1%
355.301
3.198
402.960
2.676
2018
12
56,28
89%
3%
3%
3%
88%
65%
51,78
45,74
-0,26
46,00
-1%
287.336
(2.296)
402.960
(1.547)
2019
12
56,28
89%
3%
3%
3%
87%
49%
51,78
45,15
-0,85
46,00
-2%
216.722
(7.453)
402.960
(3.792)
2020
12
56,28
88%
3%
3%
3%
88%
50%
51,78
45,84
-0,16
46,00
0%
218.179
(1.378)
402.960
(715)
2021
12
56,28
87%
3%
3%
3%
89%
60%
51,78
45,95
-0,05
46,00
0%
257.247
(460)
402.960
(285)
19
2022
12
56,28
85%
3%
3%
3%
88%
68%
51,78
45,84
-0,16
46,00
0%
285.412
(1.419)
402.960
(992)
63
2015
72
74
77
68
2016
2017
2018
2019
91
95
99
82
87
2020
2021
2022
2023
2024
104
2025
109
2026
115
2027
121
2028
127
2029
133
2030
15
2015
Source: Eneva
23
24
2017
2018
27
29
29
30
31
32
2020
2021
2022
2023
2024
34
35
37
2025
2026
2027
39
41
44
17
2016
2019
20
2028
2029
2030
EBT
Income Tax Paid
Depreciation and Amortization
Changes in Working Capital
Other Non-Cash Items
Capex
Debt Raised
Debt Paid
Total
2015
(12)
0
7
6
0
(2)
0
0
-1
2017
(1)
0
7
(1)
0
(0)
0
(0)
5
2018
2
0
7
(0)
0
0
0
(18)
-10
2019
6
0
7
(0)
0
0
0
(18)
-6
2020
10
(0)
7
(0)
0
0
0
(16)
0
2021
12
(0)
7
(0)
0
0
0
(19)
0
2022
15
(0)
7
(0)
0
0
0
(21)
0
Discount Rate
Cost of Equity
Risk Free Rate
Unlevered Beta
Levered Beta
Risk Premium
Country Risk
24,34%
2,37%
0,33x
2,81x
6,96%
2,38%
Debt (Target)
Equity / (Debt + Equity)
Debt / (Debt + Equity)
Inflation
Brazil
USA
Cost of Capital
Ke - US$
Ke - R$ Nominal
Source: Eneva
2016
(7)
0
7
(0)
0
(0)
0
0
-1
2023
18
(1)
7
(0)
0
0
0
(24)
0
2024
22
(3)
7
(0)
0
0
0
(25)
0
2025
26
(8)
7
(0)
0
0
0
(12)
13
Source
US Treasury - 10 Years, Avg. Last Twelve Months
Comparables 2 Year Unlevered Beta
Ibbotson Yearbook 2014
EMBI + Brazil, Last Twelve Months
3,02%
5,07% Brazilian Central Bank Estimate
1,99% IMF Estimate
24,34%
28,10%
21
2026
29
(8)
7
(0)
0
0
0
(0)
27
2027
30
(9)
7
(0)
0
0
0
(0)
28
2028
33
(9)
7
(0)
0
0
0
(0)
30
Date
12/03/2015
15/03/2015
15/03/2015
04/03/2015
16/03/2015
16/03/2015
2029
35
(12)
7
(0)
0
0
0
0
29
2030
37
(15)
7
(0)
0
0
0
0
29
(93)
165
489
High range
425
Mid range
361
Low range
352
Parnaba I
Parnaba III
Parnaba IV
Total
Multiple Range
EV
Equity Value
8,00x
9,00x
713
803
489
578
396
485
6,50x
7,50x
558
643
333
419
240
326
8,00x
10,00x
713
892
489
667
396
574
Source: Eneva
Note [1]: Parnaba IV Projected Cash Flows discounted by Parnaba I Cost of Equity (13.08%) result in
an equity value of Petra stake of R$16,23 MM
22
Annex I
Multiples Database
Multiples Database
Comparable Trading Statistics
Company
March, 23rd/ 2015
EBITDA
2015
EV/EBITDA
2016
2015
2016
381
4,7
1.798,3
118,9
573,1
2.371,4
411,1
341,9
5,8x
6,9x
1.258
3,9
4.893,6
74,8
3.867,9
8.761,5
1.155,6
1.092,0
7,6x
8,0x
962
6,0
5.800,9
189,4
5.279,0
11.079,9
1.243,7
1.386,6
8,9x
8,0x
503
3,8
1.921,5
133,2
1.649,1
3.570,6
315,8
357,6
11,3x
10,0x
476
3,2
1.513,7
51,1
952,4
2.466,1
499,0
574,6
4,9x
4,3x
198
9,4
1.851,3
127,0
907,2
2.758,5
294,0
372,5
9,4x
7,4x
106
8,4
889,3
113,4
846,5
1.735,9
117,7
159,7
14,8x
10,9x
653
11,0
7.202,6
65,2
1.116,5
8.319,1
938,7
1.176,5
8,9x
7,1x
Eneva S.A.
840
0,1
50,4
241,6
1.973,4
2.023,8
326,6
0,0
6,2x
0,0x
Copel
274
10,8
2.961,9
35,1
1.826,6
4.471,0
892,6
1.057,4
Cemig S.A.
5,4x
5,3x
115,0
8,3x
6,8x
116,2
8,2x
7,2x
Source: Capital IQ
24
Multiples Database
Comparable Transaction Statistics
All Transactions
Announced Date
Buyers/Investors
Target/Issuer
Percent Sought
Im plied Enterprise
Value/EBITDA
Country of Target
6.611,0
54%
9,0x
Chile
413,0
39%
6,0x
Peru
12,0x
Chile
1.317,1
50%
Compaa General de
Electricidad S.A. (SNSE:CGE)
Generandes Peru SA
Empresa Electrica Guacolda
S.A.
NV Energy, Inc.
10.688,8
100%
8,9x
United States
69,4
100%
12,5x
Bulgaria
out-14
abr-14
mar-14
mai-13
dez-12
abr-11
DPL Inc.
4.798,7
100%
7,7x
United States
jan-11
26.627,3
100%
8,3x
United States
308,9
100%
7,4x
Sweeden
91,9
42%
5,0x
Barbados
9.291,0
100%
7,5x
United States
736,6
80%
7,2x
Australia
1.226,8
64%
7,5x
Colombia
2.769,0
100%
16,2x
Singapore
11.810,5
45%
11,0x
Spain
Average
5.482,8
77%
9,0x
Median
2.043,0
90%
8,0x
dez-10
nov-10
Emera Incorporated
fev-10
FirstEnergy Corp.
nov-09
out-09
set-08
jul-08
Source: Capital IQ
25
Annex II
Parnaba I, III and IV Overview
The Parnaba Complex, located in Santo Antnio dos Lopes, Maranho, is one of the largest thermal energy generation complexes in Brazil
The Complex is formed by the thermal power plants Parnaba I, Parnaba II, Parnaba III and Parnaba IV
Currently in operation, Parnaba I (676 MW), Parnaba III (178 MW) and Parnaba IV (56 MW) are the energy suppliers to the National Grid (SIN)
Using gas produced by Parnaba Gs Natural, ENEVA is able to generate energy at low costs due to privileged logistics, to the enterprises large scale
and easy access to mains
The Parnaba Complex is certified to reach up to 3,722 MW
Parnaba I
Parnaba III
Capacity: 676 MW
Capacity: 178 MW
Efficiency: 37%
Efficiency: 38%
Auction: A-5/2008
Auction: A-5/2008
Parnaba II
Parnaba IV
Capacity: 517 MW
Capacity: 56 MW
Efficiency: 51%
Efficiency: 46%
Auction: A-3/2011
Free Market
Source: Eneva
27
R$ thousand
2012
2013
2014
682.815
960.759
(594.048)
(824.570)
88.767
136.190
(15.736)
(11.997)
(18.770)
(14.807)
(10.320)
(5.844)
(929)
(1.677)
(12.926)
(15.736)
76.771
117.420
(984)
(71.334)
(75.854)
Financial revenues
3.100
6.010
Financial expenses
(985)
(74.434)
(81.864)
(16.720)
5.436
41.566
5.716
(5.284)
(5.604)
(11.004)
152
35.962
Net Revenues
Costs
Gross profit
Operating Expenses
SG&A
Other expenses
EBIT
Net financial revenues (expenses)
EBT
Taxes
Net income (loss)
Source: Eneva
28
2012
2013
2014
85.229
158.288
206.355
83.250
32.034
38.121
Suppliers
Accounts receivable
110.113
141.072
Inventory
4.236
7.480
Taxes recoverable
7.455
14.722
Prepaid expenses
1.706
4.086
4.960
272
364
1.084.889
1.264.731
1.179.035
5.141
520
1.323
Current Assets
Cash and cash equivalents
Other credits
R$ thousand
2012
2013
2014
162.381
265.826
199.312
3.020
85.787
30.028
150.759
149.663
142.438
413
9.431
6.603
5.157
2.328
2.252
Energy reimbursement
15.739
3.032
2.878
17.991
677.593
910.569
715.373
677.593
657.588
577.981
4.187
7.117
107.223
130.275
141.571
330.144
246.624
470.705
Current Liabilities
11.359
Prepaid expenses
1.844
257
1.356
Linked deposit
34.044
24.648
Related parties
1.906
1.344
Fixed assets
882.788
1.035.111
971.709
Capital
354.465
263.619
263.619
Intangible
183.758
178.887
166.647
Accumulated losses
(24.321)
(16.995)
207.087
Total Assets
1.170.118
1.423.019
1.385.390
1.170.118
1.423.019
1.385.390
Source: Eneva
14.006
12.009
Equity
29
R$ thousand
2012
2013
2014
198.299
244.861
(221.912)
(239.403)
(23.613)
5.458
(294)
(483)
(10.070)
(294)
(483)
(10.070)
(294)
(24.096)
(4.612)
(4.790)
(10.660)
Financial revenues
3.811
9.021
Financial expenses
(8.601)
(19.681)
(294)
(28.886)
(15.272)
9.821
5.109
(294)
(19.065)
(10.163)
Net Revenues
Costs
Gross profit
Operating Expenses
Administrative
EBIT
Net financial revenues (expenses)
EBT
Taxes
Net income (loss)
Source: Eneva
30
2012
2013
2014
67
162.075
71.320
62.796
14.104
Suppliers
Accounts receivable
83.494
42.230
Taxes recoverable
10.528
Prepaid expenses
67
Derivative transactions
Other credits
2012
2013
2014
13
149.710
164.106
13
28.253
33.716
120.636
121.568
9.873
39
1.269
1.157
549
1.380
233
8.822
2.609
3.956
38.591
38.001
166.267
267.864
38.591
38.001
Taxes recoverable
249
111
47
140.040
137.077
9.821
86.218
Capital
1.213
160.271
160.271
Fixed assets
156.197
181.535
Accumulated losses
(1.166)
(20.231)
(23.194)
67
328.341
339.184
67
328.341
339.184
Current Assets
Total Assets
Source: Eneva
R$ thousand
Current Liabilities
31
R$ thousand
2012
2013
2014
5.825
50.022
(3.244)
(32.549)
2.581
17.473
(632)
(1.311)
(632)
(1.311)
1.949
16.162
12
3.416
(21.280)
Financial revenues
19
8.928
325
Financial expenses
(7)
(5.512)
(21.605)
(12)
5.365
(5.118)
(1.800)
2.783
(12)
3.565
(2.335)
Net Revenues
Costs
Gross profit
Operating Expenses
Administrative
EBIT
Net financial revenues (expenses)
EBT
Taxes
Net income (loss)
Source: Eneva
32
2012
2013
2014
Current Assets
1.596
29.035
14.270
Accounts receivable
1.596
5.074
331
8.999
2.412
R$ thousand
2012
2013
2014
Current Liabilities
1.532
83.602
5.658
Suppliers
7.888
1.797
Labour obligations
129
73
23
437
3.718
75.131
1.509
17
70
44.271
174.877
1.048
1.580
43.223
173.297
15.228
19.514
17.178
15.216
15.936
15.936
12
3.578
1.242
16.760
147.387
197.713
Tax obligations
Loans and financing
Taxes recoverable
11.755
10.698
Derivative transactions
3.105
Other credits
102
829
Taxes recoverable
Fixed assets
15.164
118.352
183.443
74
22.200
15.161
118.278
161.243
Equity
Capital
Earnings reserve
Total Assets
Source: Eneva
16.760
147.387
197.713
33
Contacts
Corrado Varoli
cvaroli@g5evercore.com
+55 11 3014 6868
Marcelo Lajchter
malajchter@g5evercore.com
+55 21 3205 9180
Arthur Horta
ahorta@g5evercore.com
+55 11 3165 4600
Graciema Bertoletti
graciema.bertoletti@g5evercore.com
+55 11 3014 6846
Sao Paulo
Rio de Janeiro
www.g5evercore.com
34
Attachment VI