COPENE Petroquímica do Nordeste S.A. New York, March, 2002

Transcription

1 Petroquímica do Nordeste S.A. New York, March, 2002

2 Certain information in this presentation may be characterized as affirmations of future prospects which are based on the current beliefs and expectations of the Administration of the Company and are subject to uncertainties that may make real results substantially different, involving risks and uncertainties that may not be subject to the control of the Company. These risks include, but are not limited to, fluctuations in exchange rates, both technological and economic factors, and other risks mentioned in Company documents filed with the Securities and Exchange Commission SEC and with the Comissão de Valores Mobiliários CVM (Brazilian Securities Commission).

3 CAMAÇARI COMPLEX US$8 billion replacement cost US$5 billion sales/yr. US$600 million exports/yr. Supplies 50% of Brazilian demand 17,000 employees 25% of Bahia s VAT revenues 12% of Bahia s GDP Largest cracker in South America, amongst the 10 largest plants in the world operating at a single site Responsible for 42% of the Brazilian demand for basic petrochemicals

4 July 25, through August 31,2001)!"""""# (September 1, 2001 on...) $%&''& ($")* +"%,

5 July 25, through August 31,2001)

6 PETROQUÍMICA DO NORDESTE S. PETRONOR (CONEPAR) TRIKEM (ODEBRECHT) PRONOR (MARIANI) OXITENO (ULTRA) POLIPROPILENO (SUZANO) POLITENO (CONEPAR/ SUZANO) EDN (DOW) 23.7% 16.0% 16.0% 10.4% 8.9% 12.5% 12.5% PETROS PREVI NORQUISA PETROQUISA OTHER 5.7% 5.8% 58.4% 15.4% 14.7% % of Voting Capital

7 % 87.24% MONÔMEROS 17.05% CETREL PETROFLEX 73.11% TEGAL 88.42% NORCELL 100% CPN INC % CODEVERDE 100% CPN DIST. Wholly-owned subsidiary Jointly-managed companies under shareholder agreement Affiliated company % of Total Capital

8 Shareholders Agreement Minority Shareholders Right of Veto Copene s General Shareholders Meeting a) Change in any right already established of Copene s shares described in its by-laws ; b) Change in the corporate purpose of the company; c) Change in the numbers of members of Copene s Board of Directors; d) Increase of paid-in capital due to capital increase through assets or rights e) Merger, spin-off or incorporation in another company or of another company into Copene f) Dissolution or liquidation of.

9 Shareholders Agreement Minority Shareholders Right of Veto Copene s Board of Directors a) Acquisition, disposition or granting of security interest of permanent assets or entering into agreement with respects to any subject witch involves amounts higher than 30% of Copene s shareholders equity; b) Entering into agreement, directly or indirectly, with affiliates, subsidiaries or shareholders; c) Participation in other companies, excluding companies with the same corporate purpose as Copene; d) Any proposal witch would lead to non-compliance of any of the following financial ratios: i) Projected Net Debt/EBITDA lower than 3.5; ii) EBITDA/Total interest higher than 3.0; iii) (EBITDA/[Interest + Amortization]) higher than 1.75; iv) All the ratios will be done considering the recent historical and projected information.

10 ( - In Million R$ USES & PROCEDURES ESAE (BACEN) Intercapital (Odebrecht/Mariani) BNDESPAR (Tag Along) Proppet 23.5 TOTAL 1,417.5 SOURCES Bridge Loan (R$ 1.201,4 million) 1, % of CDI Inter company Loan (Odebrecht/Mariani) % of CDI

11 --/ - -0 ODEBRECHT Group MARIANI Group OXITENO (ULTRA) POLIPROPILENO (SUZANO) POLITENO (CONEPAR/ SUZANO) EDN (DOW) 39.7% 16.0% 10.4% 8.9% 12.5% 12.5% PETROS PREVI NORQUISA PETROQUISA OTHERS 5.7% 5.8% 58.4% 15.4% 14.7% % of Voting Capital

12 % 100% 87.24% MONÔMEROS 17.05% CETREL PETROFLEX NOVA CAMAÇARI 73.11% TEGAL 88.42% NORCELL 100% 100% 100% 100% CPN INC % CODEVERDE ESAE INTERCAPITAL PROPPET 56.31% 11.76% 31.92% 100% CPN DIST. CONEPAR Wholly-owned subsidiary Jointly-managed companies under shareholder agreement Affiliated company 42.64% POLIALDEN 31% POLITENO % of Total Capital

13 R$ Million 12/31/00 09/30/01 Local Debt ,944.9.Bridge Loan - 1,201.4.BNDES/FINAME/BNDESPAR Debêntures Intercompany Loans Others External Debt 1, ,449.7.Eurobonds Exports Pre-payment Facility Others (24.5) GROSS DEBT 1, ,394.6 (-) Availability NET DEBT ,443.6

14 1, , R$ Million ,0 0 Cash and Marketable Securities Oct/01 to Dec/

15 !"" """# September 1, 2001 on...)

16 ,3 1. Incorporation of Nova Camaçari, Intercapital and Proppet in Sep/ Take Out operations completed in Dec/01: R$625,000, of Debentures and US$250,000, of Export Pre-payment Facility 3. Adaptation of Aratú Port was concluded and the first shipment of imported Naphtha was received in Dec/01; 4. Paid-off Copene s 4th Emission of Eurobonds in Oct/01 US$100,000, BNDESPAR Tag Along was financed in Sep/01- R$164 Million (TJLP + 4% p.a. - 5 years) 6. Restructuring of Proppet s debt with the anticipated payment of high cost loans (US$25.3 millions). 7. Administrative integration of Conepar and Polialden in Jan/02;

17 -. 14'56&''5 % of Total Capital 20.12% 100% 87.24% MONÔMEROS 17.05% CETREL PETROFLEX ESAE 73.11% TEGAL 88.42% NORCELL 100% CPN INC % CODEVERDE 100% CPN DIST % CONEPAR 43.69% Wholly-owned subsidiary Jointly-managed companies under shareholder agreement Affiliated company 42.64% POLIALDEN 31% POLITENO

18 1,-2 5&7857'50 Including the Facility and the Debentures Gross Debt Net Debt R$2,690 mm R$2,325 mm 797 In million of R$ Cash and Marketable Securities Note: 1) Assumes the US$150 MM Eurobond maturing 2007 and 2) Assumes the R$625 MM Debentures maturing ) Consolidated Figures

19 .2(2 Amount: US$250,000, Two Tranches: 3 years - US$80.0 millions 5 years - US$170.0 millions Repayment Schedule: Quarterly repayments starting 18 months from closing date Spread: 3 years 3.75% p.a. 5 years 4.75% p.a. Participation US$ Millions 3 years 5 years Total 10 Investors CPN INC Total Amortization in US$ MM 3 years 5 years Total Total

20 1- Amount: R$625,000, Date of the Issuance: October 1, 2001 Type: Fluctuant Guarantee Two Tranches: 110% of CDI and IGP-M % p.a. 8 Investors: R$410.8 millions of CDI R$214.2 millions of IGP-M Maturity: 5 years Put/Call: 3 years Amortization: Bullet Interest Payment: CDI - Semi-annual IGP-M - Annual Ratings: Standar & Poors: bra positive Credit Watch Fitch: A - (bra) Credit Watch Stable

21 Financial Covenants: Other Covenants: Limitation on leverage (Net Debt/EBITDA) and minimum interest coverage (EBITDA / Net Interest Expenses) FX hedging policy Limitations on mergers and incorporation of assets Restrictions on intercompany loans Restrictions on dividends Others, customary

22 $ The adaptation of the Aratu Port Terminal and construction of a pipeline system connecting the terminal to Copene was over on December Since then, Copene is able to exports products and imports feedstock through this facility. The first lot of imported naphtha was unloaded on December 31, 2001.

23 $%&''&

24 &''& PETROQUÍMICA DO NORDESTE S. 1. Naphtha price negotiated with Petrobrás for the period Jan. Apr with better pricing and conditions for ; 2. Naphtha imports: Goal for 2002 : 30% of total consumption or 1.2 million tons; Through March 2002: thousand tons; Payment terms : 180 days; Other Advantages: Lower prices and better products 3. Automotive gasoline began to be exported in Mar/02; 4. The capacity expansion of the Pirolisis Unit 1 started in March and will increase by 80 thousand tons/ year of ethylene the production capacity of Copene, from 1,200,000 mt/y to 1,280,000 mt/y beginning in Apr/02.

25 "##1$ Capacity expansion Capacity addition: 300,000 mt/y of ethylene, to 1.5 million mt/y, at a total cost of US$210 million Additional 80,000 mt/y to come on stream in 1Q ,000 mt/y in several stages, to be completed by 2004 Efficiency and productivity improvement under TPM (Total Productivity Management) Supply of feedstock for future growth

26 ($")*

27 "- Millions of R$ FY 1999 FY 2000 FY 2001 Net Sales Cost of Goods Sold (1.344) (2.357) (2.775) Net Interest Expense 35 (8) (139) Net Income (28) EBITDA Total Debt Net Debt OBS: Consolidated Figures

28 Breakdown of Net Sales Other Petrochemicals 20% Fuel 7% Ethylene 39% Utilities 9% Benzene 7% Butadiene 5% Propylene 13%

29 #--. &''5 Others 10% Personnel 2% Maintenance 1% Depreciation 4% Naphtha 83%

30 72 US$/t % 64% % 62% % % % % % % % 58% % 70% 60% 50% 40% 30% 20% 10% 0 1Q99 2Q99 3Q99 4Q99 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 0% Spread Ethylene Naphtha

31 R$ (3) (12) (66) (50) 32 (32) (12) (22) (71) R$ / ton (107) -150 (124) 0 jan/01 fev/01 mar/01 abr/01 mai/01 jun/01 jul/01 ago/01 set/01 out/01 nov/01 dez/01 International Naphtha Price FX Rate Naphtha Price

32 R$ MM OBS: Consolidated Figures

33 2 R$ MM (5) (25) Net Income EBIT Net Financial Expenses Includes 25 days scheduled maintenance shutdown OBS: Consolidated Figures

34 9 In Millions of R$ Increase in produc. capacity 6,1 59,8 207,3 Maintenance Capex 30,5 37,1 57,4 Maintenance shutdowns 6,2 16,0 48,1 Others 10,8 6, ,3 TOTAL 53,6 119, ,1

35 (-22 To have, at least, the following coverage over the US dollar debt maturing within the next 12 months: Trade related debt % 75% Non-trade related debt

36 -2 5&7857'5 PETROQUÍMICA DO NORDESTE S. HEDGE operations over the maturing outstanding and interest debt for the next 12 months. US$ Millions Non-Export Related Financing Eurobonds Others 13.0 Minimum Hedge (75%) Export Related Financing Export Pre-payment Facility Others 0.4 Minimum Hedge (60%) 75.7 REQUIRED HEDGE Hedge on 12/31/ Marketable Securities in US$ Exports Receivables 7.9. Swap Foreign Exchange Rate x CDI 92.6

37 "$,"% Founded in 1972 s shares (float = 42%) have been trading on the São Paulo Stock Exchange since ADR Level I established in Upgrade to Level II, with listing on the NYSE on December 21, Five bond offerings since Four issues redeemed. - Issue outstanding: 9.0% US$150 million due 2007 (put in June 2002). Ten debentures issued in the domestic market.

38 "(""1$:;. )"#" Dec/00 Jan/01 Feb/01 Mar/01 Apr/01 May/01 Jun/01 Jul/01 Aug/01 Sep/01 Oct/01 Nov/01 Dec/01 Jan/02 Feb/02 +)7 "0 PETROQUÍMICA DO NORDESTE S.

39 9+) Jan/99 Mar/99 May/99 Jul/99 Sep/99 Nov/99 Jan/00 Mar/00 May/00 Jul/00 Sep/00 Nov/00 Jan/01 Mar/01 May/01 Jul/01 Sep/01 Nov/01 Jan/02 Basis Points Source : Economática Ibovespa PNE (with adjustments) PNE (w/out adjustments)

40 1". )"#" Dec/00 Jan/01 Feb/01 Mar/01 Apr/01 May/01 Jun/01 Jul/01 Aug/01 Sep/01 Oct/01 Nov/01 Dec/01 Jan/02 Feb/02 <744 0 PETROQUÍMICA DO NORDESTE S.

41 91= PETROQUÍMICA DO NORDESTE S.A Copene PNE Dow Jones IA

42 - - Term: 10 years US$ Million % Term: 2 years 11.00% Term: 2 years 10.50% Term: 5 years 9.50% 150 Term: 8 years 9.00% 12.00% 11.00% 10.00% 9.00% 8.00% 7.00% Coupon Year of the issue 6.00% Amount issued Coupon

43 >". 1 Fitch, the international rating agency, has assigned a national scale rating of A-(bra) (A minus (bra)) to Petroquímica do Nordeste S.A. () and its 5-year, BRL625 million local debenture issuance. The Outlook for the assigned ratings is Stable. S & P Assigns bra on its Brazil National Scale to - Petroquímica do Nordeste S/A, as well as to its forthcoming Debentures issuance in the domestic market in the amount of R$625 million. The rating are simultaneously placed in credit watch with positive implication

44 BRASKEM

45 +?!-- Petroquisa Petros / Previ Odebrecht Mariani Market Copene OPP Polialden Trikem Proppet Nitrocarbono 30.9% 29.6% Politeno Copesul % of Total Capital

46 +?!-- Petroquisa Petros / Previ Odebrecht Mariani Market Copene OPP Polialden Trikem Proppet Nitrocarbono 30.9% 29.6% Politeno Copesul % of Total Capital

47 . I - Acquisition of Assets in the Public Auction II - Consolidation of Odebrecht s and Mariani s major petrochemical investments into Copene III Integration of assets after negotiation with minority shareholders

48 +? / "!"

49 &'' % of Net Sales 12.8 Companies involved in Braskem Project = 24.3% , , , Distribuidoras Politeno Exportação Trikem Oxiteno OPP Polibrasil Polialden Estireno Petroflex Outros Ciquine Proppet Rhodiaco Acrinor Nitrocarbono Dow Deten Isopol/TDI

50 )- #$%& '(()##* R$ MM Taxes Industrial Adm. Commercial Financial Total

51 +"%, 7+/))1 '02/)## 8+/))1 '409)## +, - / ,- (). -3% 14. %+*5% /. % 2. - /

52 ,?$. +"%,,: DOW BRASKEM 20% PQU 14% Basic Petrochemicals Copesul 31% Ipiranga 11% Basell (JV s) Cuyo 6% Polypropylene BRASKEM 39% 35% 44% Triunfo 3% Outros 9% Ipiranga 18% Polyethylene BRASKEM 31% Solvay 49% PVC BRASKEM 51% Politeno 12% Dow 27% Note: Mercosul Market

53 +"%,,5;/))1 '1(24## 0(9 14 1&(24 / )4 </= >(2 >)( (/ <1= 401 %!-8!-- 8!%;,!8!,;+$# -!?;?58 $# <1=-%-& </=-%%&

54 +"%, '4>/4## 2&/ R$ MM Cash and Marketable Securities on 12/31/01 Maturity 1, , , <A=-%-%& Reais Dollars (Exports Related) Dollars (Non-Exports Related) ,

55 3. +"%, B 85@*,5; % D(&4 -C/))/ <1= (&(,5;* E(&) (&1,5;*5@+ </= E1&04 /&1 <1=,1/*(1*)1C/))/& </= &

56 , Absence of conflict of interest regarding the integration of petrochemical assets from Odebrecht and Mariani groups into ; All the assets to be integrated into shall be subject to an independent appraisal by a first line investment bank; Modern principles of Corporate Governance; Right of tag-along sale to all common and preferred shareholders, in the case of cession of the control of ; Practice of the principle of Full Disclosure ; Attention to the capital market regulating entities and to the entities for protection of free competition.

57 +?> 3" Standard and Poor's has assigned a provisory national scale rating of braa-. The RES outcome on Braskem reflects the solid business and market positions that the company is expected to have in the petrochemical industry in Brazil; sound cash flow protection; product diversification; modest capital requirements over the next several years; high growth potential; and favorable competitive position due to its large scale. FITCH has assigned a provisory national scale rating of A+(bra). The rating is supported by Braskem s expectation of significant improvement of scale and operational synergies; vertical integration, strong market position in the Brazilian and Latin America; clear controlling shareholders with focus; attractive local industry; competitive production cost and proven access to international capital markets.

58 )""$ CONTACT: CARLOS AUGUSTO DE O. FREITAS - Head of IR VISIT OUR WEB SITE : Phone: Fax: caof@copene.com.br