2. Disclaimer
The material that follows is a presentation of general background information about MPX Energia S.A. and its subsidiaries (collectively, “MPX” or the “Company”) as of
the date of the presentation. It is information in summary form and does not purport to be complete. No representation or warranty, express or implied, is made
concerning, and no reliance should be placed on, the accuracy, fairness, or completeness of this information.
This presentation may contain certain forward-looking statements and information relating to MPX that reflect the current views and/or expectations of the Company
and its management with respect to its performance, business and future events. Forward-looking statements include, without limitation, any statement that may
predict, forecast, indicate or imply future results, performance or achievements, and may contain words like “may”, “plan”, “believe”, “anticipate”, “expect”, “envisages”,
“will likely result”, or any other words or phrases of similar meaning. Such statements are subject to a number of risks, uncertainties and assumptions. We caution you
that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in this
presentation. In no event, neither the Company, any of its affiliates, directors, officers, agents or employees nor any of the placement agents shall be liable before any
third party (including investors) for any investment or business decision made or action taken in reliance on the information and statements contained in this
presentation or for any consequential, special or similar damages.
This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this presentation nor anything
contained herein shall form the basis of any contract or commitment whatsoever. Recipients of this presentation are not to construe the contents of this summary as
legal, tax or investment advice and recipients should consult their own advisors in this regard.
The market and competitive position data, including market forecasts, used throughout this presentation were obtained from internal surveys, market research, publicly
available information and industry publications. Although we have no reason to believe that any of this information or these reports are inaccurate in any material
respect, we have not independently verified the competitive position, market share, market size, market growth or other data provided by third parties or by industry or
other publications. MPX, the placement agents and the underwriters do not make any representation as to the accuracy of such information.
This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part without MPX’s prior written
consent.
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3. MPX Overview
Eike Batista &
Free Float
Management
75.9% 24.1%
Power Generation
Power Generation Power Trading
Power Trading Coal Supply
Coal Supply
50% MPX / 50% EdB
100% 100% 100%
Energy
Pecém I Pecém II Itaqui Seival Mine MPX Colombia
Trading Co
70% MPX / 30% Copelmi
100% 100% 100%
Amapari
MPX Sul Porto do Açu Castilla
Energia
Drilling campaign
underway
51% MPX / 49% Eletronorte 3
5. Why MPX?
Brazil and Chile need to increase installed capacity for electric energy generation
Thermal plants are needed to increase capacity and also reliability of Brazilian
energy matrix
Delays in environmental licensing and lack of feasibility studies for new hydro projects
Matrix is 85% Hydro: highly dependable on rainfall
PPAs for thermal capacity in Brazilian regulated market and Chilean free market
allow full pass-trough of fuel costs, eliminating commodity risk
Commodity risk in Brazilian free market can be eliminated through verticalization
of supply
5
7. MPX has secured contracts for 1,080 MW of capacity
MPX Generation Ramp-Up (installed capacity MW)
+ 50% 1,080 MW
Pecém II 360 MW
720 MW
Itaqui Itaqui
360 MW 360 MW
Pecém I 360 MW* Pecém I 360 MW*
2011 2012
* Considering the 50/50 partnership with Energias do Brasil in Pecém I 7
8. Total energy contracted amounts to 899 average MW
MPX Energy Contracted (average MW)
899 avg MW
+ 44%
Pecém II 276 MW
623 avg MW
315 MW
Itaqui Itaqui 315 MW
Pecém I
308 MW* Pecém I 308 MW*
Pecém I
2012 2013
* Considering the 50/50 partnership with Energias do Brasil in Pecém I 8
9. MPX is the private listed company with the highest generation growth
Growth in Total Assured Energy from 2008 to 2013 (average MW)
AES TIETÊ 52
LIGHT 147
TRACTEBEL 218
CPFL 220
ENERGIAS DO BRASIL 324
MPX 872
Source: ANEEL, CCEE and company website 9
10. Total guaranteed fixed revenues amount to R$ 662 million
MPX Guaranteed Fixed Revenue (R$ million) *
R$ 662.20 MM
+ 45%
Pecém II R$ 206.98 MM
R$ 455.2 MM
R$ 233.95 MM Itaqui R$ 233.95 MM
Itaqui
Pecém I R$ 221.27 MM R$ 221.27 MM
Pecém I
Pecém I
2012 2013
* As of September 2008, escalated by IPCA 10
11. MPX has been able to keep a comfortable cash position since its IPO
MPX Total Cash and Cash Equivalents (R$ million)
1,832 1,815 1,710
Dec/07 Mar/08 Jun/08
* As released 11
12. Construction in Pecém I started in late June 2008
Site Preparation Site Preparation
1,832 1,710
Temporary Facilities
Coal Storage Area
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14. 2008 A-5 Auction at a glance
Energy contracted / type of fuel
Fuel Oil
64%
Total energy contracted:
3,125 average MW
LNG Open
Cycle
Imported Coal
22%
Hydro 9%
4% Sugar Cane
Biomass
1%
Energy contracted / submarket
64% Northeast
Southeast
32%
South
4%
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15. A-5 Auction Highlights
An auction for Long Term contracts dominated by typically peak plants (oil
plants and open cycle LNG plants)
MPX was the only typical “base plant” to win the auction
Limited participation of large energy players in the auction
Power system operation in bad hydrological periods will have much higher costs
for the system:
A-5 auction (2008) = 1,990 Avg MW of oil
A-3 auction (2008) = 811 Avg MW of oil
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17. Pecém II Thermal Power Plant
Location: Pecém Port, State of Ceará
Shareholders: 100%
UTE Porto do Pecém II
Fuel: Coal (imported)
Environmental Process: Installation License issued
Guaranteed Completion Schedule: April 2012
Energy sold in the auction: Jan 2013 – 2027 (15 years)
Pecém II TPP project is similar to Pecém I
and Itaqui TPPs projects, resulting in
significant capex and opex synergies
17
18. Revenues, Costs & Capex
Average MWs sold = 276 avg. MW
Gross output = 360 MW
(100% sold to Regulated Market with full
pass-through of fuel costs)
Auction Price (ICB): 140 R$/MWh
COP/CEC: 54.39 R$/MWh Fixed Revenue: R$ 206.98 MM/year1
(85.61 R$/MWh x 276 avg MW x 365 x 24)
1Escalated yearly by IPCA
42%
38%
Average Capex = US$ 1,600 /kW
18%
2%
2009 2010 2011 2012
18
19. Financing & Taxes
Financing Structure: 29% Equity, 71% Debt
- Bridge Loan: R$ 305MM (Citi, for 15 months)
- Long Term Financing
- BNDES direct: 67%, indexed by TJLP
- BNDES indirect: 33%, indexed by IPCA
Tax Advantages:
- Project is part of PAC (Brazilian Infrastructure growth plan)
- PIS/Cofins tax exemption (9.25%) of EPC costs
- 15% income tax (ADENE region/NE for 10 years)
- 59% ICMS deferral on coal imports
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21. Why did MPX decide not to bid the Açu project ?
USD appreciation ~15% (from 1.70 to 1.96 R$/US$): ~ 65% of capex is USD
denominated -- > Project cost in R$ increased ~10%
Higher hedging costs
Equipment prices and schedules at a peak
21
25. Uses and Sources up to 2013
Use of Proceeds (US$ million) Sources of Capital (US$ million)
Total US$ M ~9,356 TBD
Pre-op Capex and Working Capital ~244 IPO Proceeds
~1,100
~6,562 Debt
Capex
~8,749
~645 Cash Flow
Financial Expenses ~364 Equity Partnerships &
TBD
Customer Advances
Note:
Figures assume sale of 50% of Itaqui, Açu and Castilla (under analysis)
TBD – to be defined
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27. Next steps 2008/2009
Continue implementation of Porto de Açu I Thermal Power Plant
Environmental licensing for MPX Sul Thermal Power Plant (supplied by MPX’s
Seival coal mine)
Environmental licensing and PPAs for Castilla Thermal Power Plant
Reassessment of timing for placement of Açu’s natural gas phase
Updated Business Plan to be released before year end
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