BB and Votorantim guarantee Bertin US$ 1.5 billion to invest on Road Beltway
Valor Econômico
Banco do Brasil (Bank of Brazil) and Banco Votorantim (controlled by BB and the Votorantim group) will fund nearly 65% of the total R$ 4 billion (US$ 2.4 billion) in investments the Bertin group has to make in Southern and Eastern sections of the Road Beltway. Bertin announced yesterday it made the deposit of R$ 389 million (US$ 228.8 million) regarding the grant of two sections of the road that circles the city of São Paulo.
The financing of the two banks will be made through "project finance" and part of the guarantees offered involves earnings that already start being received this year by the southern section - which has already been built by the State Government and is now operated by Cibe and Contern (companies of the group that have won of the public bidding).
With the definition of the financing of the Road Beltway and the exclusion of Belo Monte, the Bertin group now needs to solve the situation of the investment of its thermoelectric power stations that still defaulted at nearly R$ 400 million (US$ 235.3 million). The group, originally from the slaughtering sector, actively participated in public bids in recent years promising to invest nearly R$ 15 billion (US$ 8.8 billion). It has already managed to reduce it to R$ 13 billion (US$ 7.6 billion) with the exclusion of Belo Monte and it still intends to sell part of the Road Beltway.
With a discount of 63% in this bidding, compared to a discount of 10% of the second placed in the bidding, the Bertin group was questioned by the other bidders as regards the financial capacity to put the project into operation. The financial formula, according to Kelson Elias Filho, President of Contern, contractor of the group that will carry out the work, was all outlined based on the income to be immediately obtained by the Southern section. Besides, he says the grant to be paid is five times smaller than the R$ 2 billion (US$ 1.2 billion) of the Western section, which belongs to the CCR and whose fare is very similar to that offered by Bertin, which came out as the winner. The Eastern section, however, has to be fully built.
According to announcement made yesterday by Bertin, the company has also paid up the equity capital required in the bidding rules. Besides, it informed the issue of performance bonds of nearly R$ 410 million (US$ 241.2 million), by means of the consortium of three insurance companies: Chubb, Zurich and Liberty. The deposit could be made until tomorrow, and the management of the Southern section of road will already be taken over next week. It was also informed that, besides the equity capital, the first part of the structured financing has already been used.