Presentation   material fact (memorandum of understanding)
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Presentation   material fact (memorandum of understanding) Presentation material fact (memorandum of understanding) Presentation Transcript

  • Proposal of Portfolios Merger
  • Transaction2MergerManagement and CapitalMarketsOwnershipBoard of Directors 100% BTG-WT Properties merger through the issuance of new shares (BRPR3); Maintenance of BR Properties´ Management; Ticker will be maintained under BRPR3 in the Bovespa Novo Mercado; ~58.1% current BR Properties shareholders; ~41.9% current BTG-WT shareholders + New Investors; 7 Directors, of which: 3 chosen by BRPR shareholders; 3 chosen by BTG-WT shareholders; 1 independent.Main Financial IndicatorsClosing of theTransaction 2013 Revenues over R$ 1.0 Bi 2013 EBITDA: R$ 900 mm Initial Cash Balance: R$ 1.5 BiNet Debt: R$ 2.9 Bi Until December 2011.
  • Rationale: Summary3Consolidation as the largest commercial properties company of the countrywith a portfolio of R$ 10 billion of market value and approximately 2 millionm² of GLABetter PortfolioPositioningTenants DiversificationBetter MarketPositioning Irreplicable portfolio, present in 14 states, and mainly concentrated in the best and mostliquid regions of the country;Synergies of the MergerSolid Cash Balance Higher diversification on the tenants base; Partner of choice of leading companies, for co-development and build-to-suit operations; Higher bargain power towards the tenants and to the debt markets; The new company will be substantially larger than all market competitors; Scale Gains → SG&A dilution and more efficiency in the management of the portfolio´sproperties, resulting in higher operational margins; 100% of the transaction through exchange of shares, preserving an initial cash balanceof approximately R$ 1.5 billion, and maintaining a strong investment capacity.
  • Rationale: Portfolio Positioning4Irreplicable portfolio, present in 14 states, and mainly concentrated in thebest and most liquid regions of the country— Office: 44— Warehouse: 38— Developments: 12— Retail: 30— Landbank: 2 Number of Properties : 126 Total Properties GLA: 2,099,906 m2— Office: 397,055 m²— Warehouse: 1,150,385 m²— Developments: 393,664 m²— Retail: 123,410 m²— Landbank: 35,392 m²Portfolio Breakdown – Market Value Portfolio Breakdown – Existing Properties/Development (%GLA)OfficeWarehouseBRPRRetailPortfolio Breakdown – Footprint80%20%Developments87%13%Existing Properties67,2%20,6%12,2%São Paulo Rio de Janeiro Others38,9%25,3%5,4%29,0%1,5%OfficeWarehouseRetailDevelopmentsLandPre-Merger Post-Merger% GLA
  • Rationale: Tenants Diversification5Tenant base includes some of the best known Companies in the country,spanning wide industry diversificationAmong otherhigh qualitytenantsMain Tenants ( % Total Revenues )11,0%5,9%4,0% 4,0% 3,3%Petrobrás Vivo C&A Unilever BTG
  • 10.1172.515 2.244BR Properties CCP São CarlosRationale: Market Positioning6The Company has a proven track record as the consolidator of a highlyfragmented marketAddressable Market1: 36.3 mm m2BRProperties10 OrganizedCompanies58%OrganizedCompanies11%Non-OrganizedMarket89%After Merger42%Fragmented Industry (in terms of GLA - m2)1 Including existing properties only1 Not including retail propertiesBRPR vs Competitors (in terms of PortfolioMarket Value – R$ Bi)4,0x 4,5x
  • Rationale: Synergies of the Merger7Significant synergy gains both on the revenues side and operationalexpenses dilution Scale Gains → SG&A dilutionMain Financial Indicators2013 RevenueApproximatelyR$ 1 billion2013 EBITDAApproximatelyR$ 900 millionInitial Cash BalanceApproximatelyR$ 1.5 billion More efficiency in the management of the portfolio´s properties, resulting in higherfinancial and operational margins;EBITDA Margin90,2%91,7%93,6%2011 2012 2013
  • Rationale: Solid Cash Balance8Transaction 100% through shares exchange, preserving an initial cashbalance of R$ 1.5 billionPipeline (R$ mm)Loan to Value (Net Debt)Transaction with no cash deployment;Strong buying power to take advantage of currentopportunities in the market;Initial Cash Balance of R$ 1.5 Bi.10.11714.7293.220762450 180CurrentPortfolioOffice Build-to-Suit Retail Industrial Total32%35%34%31%27%22%16%0%10%20%30%40%50%2011 2012 2013 2014 2015 2016 2017
  • Portfolio´s Pricing at NAV Valuation by type and quality of the properties based on potential revenues: Properties under development to be delivered within 24 months: Priced as existing properties, discounted by the reminiscent value of CAPEX; Future value discounted at 6.9% p.y. (real capital cost); 3 months of vacancy after delivery; Properties under development to be delivered after 24 months, appraised at land cost; Average Cap on Cost 16.13% Liquidity discount on the NAV of BTG-WT´s portfolio; Tax losses carried forward; Adjustments to the cost of debt in order to equalize the differences of the cost of capital.Valuation9Considered Assumptions for the Valuation Triple A Office Buildings: 9.0%; Class A Warehouses: 9.5%; Retail: 9.5%; Class A Office Buildings: 10.0% Other Warehouses: 10.0%
  • Combined PortfolioGross Leasable Area (m²) Market Value (R$ mm)BRPR BTG Combined297.959397.055773.0271.150.385108.070123.410179.186393.66435.39299.096377.35815.340214.47835.392Office Warehouse Retail Developments Land1,358,242 m²741,665 m² 2,099,906 m²BRPR BTG CombinedR$2.726R$3.937R$1.676R$2.555R$445R$544R$319R$2.931R$150R$1.210R$879R$99R$2.611R$150Office Warehouse Retail Developments LandR$ 5,167R$ 4,949 R$ 10,117
  • Merger / Corporate GovernanceMain Points For Approval: Transaction is subject to satisfactory due diligence for BR Properties and the exercise of the right ofwithdrawal by up to 10% of BRPR´s shareholders; Financial Institution’s fairness opinion to the Board; BRPR´s shareholders’ approval; Board of Directors comprised of 7 members, of which one is independent; Introduction of the following changes to the Company´s Bylaws:1. The company will be ruled, for at least 30 months, according to a Business Plan which will describe the currentmanagement structure, the portfolio´s composition, investment policy, indebtedness limits, acquisition and saleof assets. The Plan can only be modified prior to 30 months if approved by at least 6 out of the 7 members ofthe Board of Directors;2. The current management’s term of office will be renewed for additional 3 years;3. The management can only be modified if approved by at least 6 out of the 7 Directors;4. Acquisition, indebtedness and sale of properties matters can only be submitted to the Board of Directors ifunanimously approved by the management;5. Maintenance of the remaining bylaws dispositions;6. In case of conflict of interest between shareholders, conflicted parties cannot vote.