PlanoAgrenco

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Agrenco - Plano aos credores

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PlanoAgrenco

  1. 1. Accelerang  the  recovery  of  the    Agrenco  Group  through  the  GEM   financing  line   Proposal  to  the  creditors  of  the  Agrenco   Group  from  the  Board  of    Agrenco  Ltd   February  3,  2011  
  2. 2. Summary  •  On  February  1,  Agrenco  Ltd  entered  into  an  agreement  with   GEM,  providing  the  company  with  a  financing-­‐line  of  up  to  BRL   130  million  •  Such  financing  can  be  achieved  by  Agrenco  Ltd  shareholders   pledging  their  shares  in  the  company  to  GEM  •  This  creates  an  aKracve  opportunity  for  creditors  and   shareholder  of  Agrenco,  as  it  will  provide  the  needed  capital  to   the  group  and  allow  for  operaons  to  start  •  With  the  proposed  plan,  the  creditors  may  expect  a  total  pay-­‐ back  over  a  7-­‐10  year  period  •  If  the  plan  is  approved  as  proposed,  the  likelihood  of  Agrenco   Ltd  raising  addional  capital  in  the  market  is  high,  thus  further   shortening  the  creditor  pay-­‐back  me  •  Therefore,  Agrenco  Ltd,  supported  by  its  shareholders,  is  asking   the  creditors  to  bring  this  plan  for  vong  as  soon  as  possible  
  3. 3. BRL  130  million  financing  agreement  signed  with  GEM  on  Feb  1  2011   •  GEM  Global  Yield  Fund  Limited  is  one  of  the  investment   vehicles  of  The  Global  Emerging  Markets  Group     •  GEM  is  a  $3.4  billion  alternave  investment  group   founded  in  1991  with  275  completed  transacons  in  over   55  countries.   •  Offices  in  New-­‐York,  Paris  and  Geneva     •  GEM  funds  include:  CITIC  /  GEM  Fund;  VC  Bank  /  MENA   GEM  Fund;  Kinderhook  Industries  LP;  GEM  Global  Yield   Fund  Ltd  and  GEM  India  Advisors.   •  Have  done  similar  deals  in  Brazil  before   •  Innovave  financing  model  creang  mutual  security   •  No  risk  for  exisng  creditors  (No  subordinaon)  
  4. 4. Structure  of  GEM-­‐financing  (simplified  model)   1)  Agrenco  Holdgin  B.V.   Agrenco   lends  shares  to  Agrenco   Holding  B.V.   Ltd   2)  Agrenco  Ltd  uses  these   as  guarantee  for  GEM   3)      GEM  provides  financing   to  Agrenco  Ltd.   Agrenco  Ltd   GEM   BRL  130   mill   4)      Capital  channeled  to   Agrenco   operang  companies  in   Netherlands   Brazil   Available  working  capital   Producon   Note:  Must  be  taken  out  of   Brazilian   bankruptcy   Start  re-­‐payment  of   enes   creditors  
  5. 5. Key  elements  of  the  plan  proposed  to  the  creditors  •  Agrenco  Ltd  draws  on  the  GEM-­‐line  as  illustrated  in  the  model      •  Through  the  GEM-­‐line,  Agrenco  Ltd  will  make  available  the  needed   operang  capital  to  start  producing  at  the  two  plants  •  Competent,  experienced  management  to  be  put  in  place  (pre-­‐ negoated  agreement  with  most  experienced  industry  praconers)  •  The  plants  will  be  run,  in  line  with  the  PRJ,  but  with  important   improvements  to  accelerate  pay-­‐back  me  to  creditors  and  maximize   EBIDTA.    •  This  includes  processing  of  high  margin  specialty  products  and  sale  of   Carbon  Credits  •  Agrenco  Netherlands  N.V.  taken  out  of  bankruptcy,  and  the  complete   company  structure  remains    •  This  is  will  improve  confidence  in  the  company  and  also  to  allow  for   channeling  of  funds  from  Agrenco  Ltd  to  the  Brazilian  operang   enes  
  6. 6. Key  elements  of  the  plan  proposed  to  the  creditors  connued   •  A  unified  corporate  governance  structure  throughout   the  group,  acceptable  to  both  creditors  and   shareholders   •  Incenve  structure  in  place  to  ensure  a  more  aKracve   pay-­‐back  plan  to  creditor  group  but  also  opmal  share-­‐ price  development   •  A  new  era  of  collaboraon  and  harmony  among  the   various  stake-­‐holder  groups.     •  Ensure  a  Board-­‐composion  with  competent  people   acceptable  to  both  creditors  and  shareholders.   •  Pursue  interest  from  mulple  naonal  and   internaonal  players  who  have  expressed  interest  in   invesng  in  the  company.     •  GEM  only  the  first  step  in  a  larger  capitalizaon  plan  
  7. 7. Projected  cash  flow  –  7-­‐10  year  payback  
  8. 8. Key  assumpons  -­‐  conservave      •  The  calculaon  is  conservavely  based  on  esmated  soy  complex   market  prices  for  May  2011  •  The  factories  will  produce  High  Protein  and  Super  High  Protein  meal  -­‐   NON  GMO  at  AA  and  GMO  at  Caarapo    •  The  prices  used  for  energy  are  on  the  low  side:    R$  83/Mwh  for  spot   and  R$  132/Mwh  for  long  term  contracts  •  Due  to  higher  commodity  prices,  the  corresponding  biodiesel  price   has  been  esmated  to  R$  2350/m3  •  Sale  of  carbon  credit  only  from  the  second  year  and  only  for  energy    •  Addionally,  only  included  for  electricity  producon  and  nothing  for   bio-­‐diesel.  This  could  give  another  USD  10-­‐15  million  annually  if   produced  according  to  approved  Agrenco  methodology  •  With  less  conservave  assumpons,  using  up  to  date  market  prices,   the  pay-­‐back  me  would  be  less  than  7  years.  
  9. 9. Proposed  corporate  governance  scheme  •  The  legal  structure  of  the  group  stays  as  assumed  under  the  PRJ  •  Board  composion  to  be  agreed  on  by  creditors  and  shareholders  according   to  the  following  principles   –  Relevant  industry  experse   –  Complimentary  skills   –  Integrity   –  Non-­‐conflicted  •  CEO  to  be  named  by  the  Board.  Creditors  have  a  right  to  approve  the   indicaon.    •  Repayment  of  creditors  to  follow  strict  scheme.  No  dividend-­‐payment   allowed  unless  creditor  re-­‐payment  targets  are  met  •  Lean  and  mean  administraon  to  minimize  costs.  •  Management  incenves  for  max  EBIDTA,  share-­‐price  development  and  re-­‐ payment  of  creditors  according  to  target  plan    
  10. 10. What  are  the  benefits  to  the  creditors?  •  As  it  stands  today,  only  viable  source  of  operang  capital  (including  WC)  •  The  GEM-­‐deal  is  structured  in  order  to  maximize  the  incenves  for  the   company  to  become  highly  profitable    •  That  is  also  what  will  lead  to  the  faster  re-­‐payment  to  the  creditors  •  In  the  original  PRJ,  it  was  esmated  a  pay-­‐back  period  of  14  years.  With  the   current  delays,  this  may  be  closer  to  20  years,  unless  the  plan  is  improved  •  The  plan  proposed  by  Agrenco  Ltd,  realiscally  cuts  this  period  to  7-­‐9  years.  •  With  the  company  out  of  legal  proceedings,  progress  can  be  achieved  faster  •  Less  work  and  follow  up  for  the  creditors  •  Posive  atmosphere  to  prevail  •  The  stock-­‐market  will  gain  addional  faith  in  the  company,  making  it  possible   later  to  raise  addional  capital  for  faster  repayment  •  The  GEM-­‐financing  line  does  not  in  any  way  deteriorate  security  posion  of   exisng  creditors,  as  whole  line  is  guaranteed  by  shareholder  assets  •  Interest  from  mulple  naonal  and  internaonal  players  to  invest  in  the   company  already  shown  
  11. 11. Important  condions  by  Agrenco  Ltd  to  provide  capital   •  A  unified,  corporate  governance  structure  at  all  levels   •  Agreement  on  individuals  that  are  mutually  acceptable  on   Board  level   •  Corporate  structure  of  the  group  remains  whole   •  All  legal  proceedings  stopped   •  Stand-­‐sll  agreement  at  all  levels   •  The  company  taken  out  of  Recuperaon  Judicial  when   possible  (to  be  explored  jointly  with  creditor  group)   •  Operang  management  must  be  experienced  industry   professionals   •  Company  to  build  up  its  own  industrial  management  team   •  Personal  guarantees  cancelled   •  Company  allowed  to  operate  as  a  normal  company,   however  with  a  clear  pay-­‐back  plan  to  creditors  based  on   EBIDTA  generaon   •  Open  dialogue  directly  with  the  creditors  
  12. 12. Summary  •  On  February  1,  Agrenco  Ltd  entered  into  an  agreement  with   GEM,  providing  the  company  with  a  financing-­‐line  of  up  to  BRL   130  million  •  Such  financing  can  be  achieved  by  Agrenco  Ltd  shareholders   pledging  their  shares  in  the  company  to  GEM  •  This  creates  an  aKracve  opportunity  for  creditors  and   shareholder  of  Agrenco,  as  it  will  provide  the  needed  capital  to   the  group  and  allow  for  operaons  to  start  •  With  the  proposed  plan,  the  creditors  may  expect  a  total  pay-­‐ back  over  a  7-­‐10  year  period  •  If  the  plan  is  approved  as  proposed,  the  likelihood  of  Agrenco   Ltd  raising  addional  capital  in  the  market  is  high,  thus  further   shortening  the  creditor  pay-­‐back  me  •  Therefore,  Agrenco  Ltd,  supported  by  its  shareholders,  is  asking   the  creditors  to  bring  this  plan  for  vong  as  soon  as  possible  

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