Enel Americas S.a. · BCS:ENELAM
Enel Americas — Enersis — Merger or Acquisition (November 2015)
18 slides from Enel Americas's merger presentation, Nov 24, 2015
Slide 1: The Spin-Offs
The Spin-Offs First, as shown in the chart below, each of Empresa Nacional de Electricidad S.A., a Chilean electricity generation company and subsidiary of the Company (“Endesa Chile”), and Chilectra S.A., a Chilean electricity distribution company and subsidiary of the Company (“Chilectra”), will s
Slide 2: Separation of Enersis into Enersis Chile and Enersis Américas
Second, following the Endesa/Chilectra Spin-Offs, the Company will conduct a “ división ” or “demerger” to separate the Company into two companies. The new company, Enersis Chile S.A. (“Enersis Chile”) will be established as a separate company and will be assigned the equity interests, assets and as
Slide 3: Spin-Off conditions and the Merger
Each of the Endesa/Chilectra Spin-Offs is conditioned on the approval by the Company’s shareholders of the Spin-Off, and the Spin-Off is conditioned on the approval by the respective shareholders of Endesa Chile and Chilectra of the Endesa/Chilectra Spin-Offs. See “The Spin-Off—The Background and De
Slide 4: Merger shareholder meetings and proxy statement
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: Market characteristics for Enersis Américas and Enersis Chile
Enersis Americas Enersis Chile Moderate growth in energy demand, nearing growth rates of developed countries and increased competition in the power generation sector Relatively inelastic average wholesale prices backed by long term contracts Energy contracts indexed to US$, protecting margins from c
Slide 11: Tailored strategies for generation and distribution
Enersis Americas Enersis Chile Flexibility and operational efficiency in existing plants Investments for recovery and incremental availability of thermoelectric plants in Chile Development and flexible pipeline of medium-sized projects Gas portfolio optimization (synergies between thermoelectric and
Slide 12: KPIs and focus for Enersis Américas and Chile
KPI Enersis Americas KPI Chile P&L by plant Optimization of fuels portfolio—gas flexibility Maximize availability of existing capacity Investments in sustainability and the environment Immediate cash flow generation Valued-added services proposition (insurance, credit cards)—more frequent regulatory
Slide 13: Reduced cross shareholdings and higher visibility
5 Reduced cross shareholdings and higher visibility Transaction rationale As a result of the reorganization, shareholders would benefit from a much simpler structure and greater visibility: Significant reduction in minority interest Greater cash retention due to lower leakage Only holding company to
Slide 14: Implementation of business efficiencies: annual savings
~220 ~42 ~15 ~50 ~327 Note: Comparison data: 2019 vs real 2015 ~90 ~10 n.a. ~100 MMUS$ MMUS$ n.a. Transaction rationale Implementation of business efficiencies Annual savings OPEX1 Cash pooling and financial expenses Tax Total Staff & Services expenses1
Slide 15: Efficiencies plan actions
New local and global procurement process ACTIONS Investments in the Remote Plan to reduce reaction time when power failures occur (Medium Voltage) Investments in the quality of supply to reduce the number of failures, allowing improvements in the maintenance of Low Voltage's network (corrective, pre
Slide 16: Efficiencies Plan – Opex trend Dx Americas
Improvements in legal process The implementation of the smart meters, allowing for savings in the process of reading, disconnection and reconnection of supply due to remote monitoring and operation ACTIONS Investments in the Remote Plan to reduce reaction time when power failures occurs (Medium Volt
Slide 17: 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). Efficiencies: 2016-2020 Business Plan Efficiencies Plan – Opex trend for Gx in Chile Improvement of own staff productivity: greater integration with the
Slide 18: Efficiencies Plan – Opex trend Gx Americas
Optimization of the contracts of Operation and Generation ‘s fleet Maintenance Less licenses and efficiencies in ICT transformation processes ACTIONS Optimization of the scheduled stop coal plant plan in Colombia Centralization of the HYDRO Plant Control New local and global procurement process Hydr