Agrenco - Plano aos credores

1. Accelera'ng
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. 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
aKrac've
opportunity
for
creditors
and
shareholder
of
Agrenco,
as
it
will
provide
the
needed
capital
to
the
group
and
allow
for
opera'ons
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
addi'onal
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
vo'ng
as
soon
as
possible

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
alterna've
investment
group
founded
in
1991
with
275
completed
transac'ons
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
• Innova've
financing
model
crea'ng
mutual
security
• No
risk
for
exis'ng
creditors
(No
subordina'on)

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
opera'ng
companies
in
Netherlands
Brazil
Available
working
capital
Produc'on
Note:
Must
be
taken
out
of
Brazilian
bankruptcy
Start
re-­‐payment
of
en''es
creditors

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
opera'ng
capital
to
start
producing
at
the
two
plants
• Competent,
experienced
management
to
be
put
in
place
(pre-­‐
nego'ated
agreement
with
most
experienced
industry
prac''oners)
• 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
opera'ng
en''es

6. Key
elements
of
the
plan
proposed
to
the
creditors
con'nued
• A
unified
corporate
governance
structure
throughout
the
group,
acceptable
to
both
creditors
and
shareholders
• Incen've
structure
in
place
to
ensure
a
more
aKrac've
pay-­‐back
plan
to
creditor
group
but
also
op'mal
share-­‐
price
development
• A
new
era
of
collabora'on
and
harmony
among
the
various
stake-­‐holder
groups.
• Ensure
a
Board-­‐composi'on
with
competent
people
acceptable
to
both
creditors
and
shareholders.
• Pursue
interest
from
mul'ple
na'onal
and
interna'onal
players
who
have
expressed
interest
in
inves'ng
in
the
company.
• GEM
only
the
first
step
in
a
larger
capitaliza'on
plan

7. Projected
cash
flow
–
7-­‐10
year
payback

8. Key
assump'ons
-­‐
conserva've
• The
calcula'on
is
conserva'vely
based
on
es'mated
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
es'mated
to
R$
2350/m3
• Sale
of
carbon
credit
only
from
the
second
year
and
only
for
energy
• Addi'onally,
only
included
for
electricity
produc'on
and
nothing
for
bio-­‐diesel.
This
could
give
another
USD
10-­‐15
million
annually
if
produced
according
to
approved
Agrenco
methodology
• With
less
conserva've
assump'ons,
using
up
to
date
market
prices,
the
pay-­‐back
'me
would
be
less
than
7
years.

9. Proposed
corporate
governance
scheme
• The
legal
structure
of
the
group
stays
as
assumed
under
the
PRJ
• Board
composi'on
to
be
agreed
on
by
creditors
and
shareholders
according
to
the
following
principles
– Relevant
industry
exper'se
– Complimentary
skills
– Integrity
– Non-­‐conflicted
• CEO
to
be
named
by
the
Board.
Creditors
have
a
right
to
approve
the
indica'on.
• Repayment
of
creditors
to
follow
strict
scheme.
No
dividend-­‐payment
allowed
unless
creditor
re-­‐payment
targets
are
met
• Lean
and
mean
administra'on
to
minimize
costs.
• Management
incen'ves
for
max
EBIDTA,
share-­‐price
development
and
re-­‐
payment
of
creditors
according
to
target
plan

10. What
are
the
benefits
to
the
creditors?
• As
it
stands
today,
only
viable
source
of
opera'ng
capital
(including
WC)
• The
GEM-­‐deal
is
structured
in
order
to
maximize
the
incen'ves
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
es'mated
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,
realis'cally
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
• Posi've
atmosphere
to
prevail
• The
stock-­‐market
will
gain
addi'onal
faith
in
the
company,
making
it
possible
later
to
raise
addi'onal
capital
for
faster
repayment
• The
GEM-­‐financing
line
does
not
in
any
way
deteriorate
security
posi'on
of
exis'ng
creditors,
as
whole
line
is
guaranteed
by
shareholder
assets
• Interest
from
mul'ple
na'onal
and
interna'onal
players
to
invest
in
the
company
already
shown

11. Important
condi'ons
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-­‐s'll
agreement
at
all
levels
• The
company
taken
out
of
Recupera'on
Judicial
when
possible
(to
be
explored
jointly
with
creditor
group)
• Opera'ng
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
genera'on
• Open
dialogue
directly
with
the
creditors

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
aKrac've
opportunity
for
creditors
and
shareholder
of
Agrenco,
as
it
will
provide
the
needed
capital
to
the
group
and
allow
for
opera'ons
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
addi'onal
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
vo'ng
as
soon
as
possible