Group beat CCR and Pátria with R$1.2bn bid

09/16/2022

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Ecorodovias won the auction of toll roads included in the Noroeste Paulista lot, held on Thursday. The company made a bid of R$1.24 billion in fixed concession to be paid to the government of São Paulo. The minimum price was almost symbolic, at R$7.6 million.

The market reacted very negatively to the news. Shares ended the trading session down 11.97%, at R$5.37.

The auction attracted two other groups. CCR made a bid of R$753.8 million, and asset management company Pátria offered R$321.3 million. Since the difference between the two competing bids and the winner was significant, the competition ended before the open outcry stage.

In addition to a fixed amount to be paid by Ecorodovias, the concession provides for variable fees of 8.5% of gross revenue, which will be paid throughout the 30-year contract. The company also has to invest R$10.4 billion and will foot R$4 billion in operating costs.

The new concession includes 600 kilometers of roads, which connect cities such as São José do Rio Preto, Araraquara, São Carlos and Barretos. This is a new auction for two contracts that are about to end: Tebe, which is controlled by engineering companies, and Triângulo do Sol, owned by Bertin and the Italian group Atlantia.

Marcello Guidotti — Foto: Divulgação/Ricardo Reis/B3

Asked about the financial impact of the new project, Ecorodovias CEO Marcello Guidotti said the contract will reduce the group’s leverage ratio in the first years since it will generate more revenue than debt in the short term.

“We studied this project very well. It is a mature lot, with consolidated traffic, and a very simple capex in terms of engineering. There are no major works or complexities. [Input] inflation is about to peak and there are signs of improvement. All this was taken into consideration,” the executive said.

The company has been expanding strongly in recent years. Since 2019, three relevant road concessions have been signed: Ecovias do Cerrado (BR-364/365), with at least R$2.1 billion of capex; Ecovias do Araguaia (BR-153), in partnership with GLP, with R$7.8 billion in capex; and the Rio-Valadares corridor, won this year, with R$11 billion in capex.

Besides the auctions, last year the group signed an agreement with the São Paulo state government, in which it obtained an extension to its concession for the Imigrantes highway and included R$1.5 billion of new construction work, against payment of R$613 million to the state.

In June this year, the group’s net-debt-to-EBITDA ratio reached 4.1 times – compared with 2.6 times one year before. The current level is seen as relatively high in this industry.

As a result, the company had been signaling that it would be more selective in auctions, prioritizing assets that offer synergies with its network and that generate revenue from the start – as is the case of Noroeste, since the roads already have toll collection.

Mr. Guidotti said that the company has “these metrics [of indebtedness] very much in check” and that the project fits the group’s strategy.

The executive also highlighted that the group is still interested in federal road projects that could potentially be launched this year: the lots in Paraná and BR-381, in Minas Gerais.

“They are our priorities. They are very likely to come out this year. Maybe [there will be a delay because] because of the election, but these are state plans, not government plans. These are very important corridors,” he said.

With the victory in the auction, Ecorodovias, controlled by the Italian group Gavio, is also consolidated as the main road operator in the country. The company, which was already the sector leader in terms of length of highways, now operates nearly 4,700 kilometers in Brazil.

The government of São Paulo celebrated the result. “We had the three largest highway operators competing in the auction, with a fierce competition, which is a reason for great pride,” said Tarcila Reis Jordão, the state’s deputy secretary of partnerships.

The state administration had canceled two road projects: Litoral Paulista, which was questioned by the state’s court of accounts, and the public-private partnership of Rodoanel Norte, which, in a first attempt, did not draw any interested buyer. The government has published the call for bids and scheduled a new auction for Rodoanel – a new section of the beltway around São Paulo –, but the decision on the competition will be left to the next administration. The competition has been scheduled for January.

*By Taís Hirata — São Paulo

Source: Valor International

https://valorinternational.globo.com/