05/28/2009 08h10

Odebrecht receives US$ 476 million to invest in D.Pedro

Valor Econômico

The Santander bank releases today the first R$ 370 million (US$ 173.2 million) installment of a R$ 1 billion (US$ 476 million) Bridge Loan for the concessionaire of the Dom Pedro Highway, Rota das Bandeiras, to start the investments in the segment. The most expensive of the highways bid by the Government of São Paulo in the end of last year, Dom Pedro requires total investments of R$ 2.4 billion (US$ 1.1 billion) throughout the 30-year concession, besides the payment of R$ 1.3 billion (US$ 619 million) for the Grant in 18 months - exactly the term of the bridge loan.

According to Santander, leader of the consortium of five banks involved in the business, it was the first time in Brazil a bridge loan for a concession was organized as a "project finance", in other words, it was completely supported by the future income of the undertaking. With that, there was no need for the business partners - in the case, Odebrecht -, to provide corporate guarantees thus reducing the weight of the undertaking in balance of the building company.

The forecast of the concessionaire is that until September the seven toll courts will be in operation, which will give Dom Pedro, at least three months of full earnings before next year, when the first balance of the company will be published. The plan is to get to the end of the 18 months of the bridge loan with a year of cash generation in order to negotiate a long term credit facility to cover the loan and also finance the rest of the investments foreseen in the project.

According to the President of Rota das Bandeiras, the forecast is that R$ 1.2 billion of the R$ 2.4 billion (US$ 571/1.1 billion) in investments established in the bidding rules will be made in the first six years of the concession. The main investments involve the enlargement of two segments of the side roads undertaken by the company, the extension of the road ring of Campinas and the construction of a new road crossing the perimeter of the municipality of Itatiba.

Santander is also providing consulting to the long term line that will finance part of these projects. The idea is to get a BNDES line, but the bank is analyzing other possibilities, such as official international lines - World Bank or IDB - and even raise funds in the private market. The size of the long term line will also depend on the capacity to generate cash that will be registered in the highway. Throughout 2008, Dom Pedro registered an increase of 14% in the flow of cars, but there was a retraction caused by the crisis, as happened in other highways.