Enel Generacion Chile S.a. · BCS:ENELGXCH
Enel Generacion Chile — Empresa Nacional de Electricidad — Merger or Acquisition (November 2015)
15 slides from Enel Generacion Chile's merger presentation, Nov 24, 2015
Slide 1: The Spin-Offs
The Spin-Offs First, as shown in the chart below, the Company will conduct a “división” or “demerger” under Chilean corporate law to separate the Company into two companies. The new company, Endesa Américas S.A. (“Endesa Américas”) will be established as a separate company and will be assigned the e
Slide 2: Enersis spin-off and Enersis Chile
Second, following the Endesa/Chilectra Spin-Offs, Enersis will also conduct a “ división ” or “demerger” and spin-off to its shareholders pro rata the shares of a new Chilean company, Enersis Chile S.A. (“Enersis Chile”) that will be assigned the Chilean businesses and assets, including the equity i
Slide 3: Conditions and The Merger
Each of the Spin-Off and the Chilectra Spin-Off is conditioned on the approval by the Enersis’ shareholders of the Enersis Spin-Off, and the Spin-Off is conditioned on the approval by the shareholders of Chilectra of the Chilectra Spin-Off. See “The Spin-Off—The Background and Description of the Spi
Slide 4: Extraordinary shareholders' meetings to approve the Merger
In connection with the Merger, each of Enersis Américas, Endesa Américas and Chilectra Américas will hold an extraordinary shareholders’ meeting to approve the Merger. Prior to such extraordinary shareholders’ meetings, Enersis Américas will register the shares of the Surviving Company to be issued
Slide 5: Expected benefits from the Reorganization
Santiago, 11/05/2015 Expected benefits from the Reorganization Description of the Purposes and Benefits of the Reorganization
Slide 6: Current structure and post-reorganization structure
Listed Post-reorganization Pure Chilean player Latin America investment vehicle (Chile based) Chilectra Endesa Chile 99.1% 60.0% Chilean Dx player Chilean Gx player Enersis Chile Distribution and generation Enersis Americas ARG BRA COL PE Cross shareholdings Transaction highlights New geographic and
Slide 7: Current situation and transaction rationale
Current situation Largest power platform in Latin America with unique and well diversified portfolio of assets û Complex corporate structure Transaction rationale The reorganization plan results in a more efficient and focused structure to maximize value creation Misalignment of interests 1 High lev
Slide 8: Interest alignment – Emgesa and Edegel case studies
Perception of interest misalignment between Endesa Chile and Enersis over investment policy (e.g. recent acquisition of 21% stake in Edegel by Enersis) Accounting consolidation does not reflect control (e.g. Enersis yields to Endesa Chile the voting rights related to Emgesa) Ownership stakes combine
Slide 9: Leaner decision making process – Ampla case study
Multiple decision layers Delay in strategy implementation Potential for conflict of interest (e.g. over development of distribution in Brazil) One single vehicle for all relevant decisions Streamlined decision process ENEL Brazil (holding) 50% 35% 11% 60% 99% AMPLA (distribution) 99% 1 2 3 4 Current
Slide 10: Different industrial focuses
Enersis Americas Endesa Chile Generation Distribution & retail 3 Different industrial focuses… Transaction highlights Moderate growth in energy demand, nearing growth rates of developed countries and increased competition in the power generation sector Relatively inelastic average wholesale prices b
Slide 11: …require tailored strategies
Enersis Americas Endesa Chile Generation Distribution & retail 3 …require tailored strategies Transaction highlights Central Cost Flexibility and operational efficiency in existing plants Investments for recovery and incremental availability of thermoelectric plants in Chile Development and flexible
Slide 12: Improved ability to measure management's results
KPI Enersis Americas KPI Chile Generation Distribution & retail 3 Improved ability to measure management’s results Transaction highlights P&L by plant Optimization of fuels portfolio—gas flexibility Maximize availability of existing capacity Investments in sustainability and the environment Immediat
Slide 13: Reduced cross shareholdings and higher visibility
Note: Owns less than 50% but consolidates Transaction highlights As a result of the reorganization, shareholders would benefit from a much simpler structure and greater visibility: Significant reduction in minority interests Investment in Brazil subsidiaries will now be consolidated Single energy in
Slide 14: Implementation of business efficiencies
Annual savings OPEX 1 ~6 ~8 ~30 ~44 Tax Total SG&A 1 Transaction highlights Implementation of business efficiencies ~50 ~0 ~50 US$MM US$MM n.a. Americas Note: Comparison 2019 vs homogeneous 2019
Slide 15: Efficiencies: 2016-2020 Business Plan
Efficiencies: 2016-2020 Business Plan Efficiencies Plan – Opex trend for Gx in Chile ACTIONS Gx Chile Opex (kUSD real/MW) xxx OPEX (Homogenenous costs as of 2014. Fx rates and inflation, net of non-recurring and perimeter effects). Improvement of own staff productivity: greater integration with the
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