Arquivos Vibra Energia - Murray Advogados

Contract provides R$129.5m payment to shareholders and direct injection of R$30m

07/05/2022

Vibra Energia intends to achieve the commercialization of its first million cubic meters of biomethane in three years, reaching the mark of 2 million m³/day in the next five years, with the acquisition of 50% of ZEG Biogas. This volume corresponds to 20% of the potential for biomethane production – obtained by purifying biogas – from vinasse, a residue from ethanol production. The expansion of supply aims to meet an avid demand for green products.

The other 50% stake will remain with FFL and ZEG. With the contract signed on Friday, Vibra will disburse R$129.5 million to ZEG Biogas shareholders and will inject R$30 million directly into the company’s cash flow, in addition to the commitment to invest R$412 million for the development of new projects that are in the pipeline, according to the eventual capital needs.

The two companies intend to develop at least seven ZEG Biogas projects, one of them about to start commercial operation in the coming months, in São José dos Campos (São Paulo) – and which already has 100% of its biomethane sold. Four other projects are being negotiated with sugar and alcohol groups, using vinasse, and two other plants are under negotiations with landfill companies.

Marcelo Bragança — Foto: Marcelo Bragança

According to Marcelo Bragança, Vibra’s deputy chief operations officer, the companies are already talking to clients who are waiting for these new projects. The implementation deadlines can range from 12 to 24 months, depending on the origin of the product (whether from landfills or agribusiness waste). In addition to vinasse, there are already evaluations for projects that use the waste from the production of orange juice and palm residues.

“It is an infrastructure project that demands capex, time, and patience,” said Mr. Bragança. “We have our feet on the ground, but we think we are going to move very fast,” added Daniel Rossi, board member at ZEG Biogas. Resources to get the projects up and running, whether own capital or capital market capital, are not a bottleneck, say the executives.

Besides logistical and operational challenges, the biggest one, says Mr. Rossi, with ZEG Biogas, is knowledge about the product, which still requires demystification – something expected as the plants start commercial operation. The executive foresees a biomethane contracting boom by next year, which will ensure the development capacity of the projects.

“The biggest bottleneck today is to produce enough quantity to meet the demand,” said Mr. Rossi, explaining that the development of the supply is a tripartite negotiation. It involves the company that develops the biogas, the one that holds the residue, and the purchasing market.

Mr. Bragança, with Vibra, doesn’t rule out negotiating volumes directly with gas distributors, amid the current moment of market opening, considering them as potential customers, especially because some of them are already promoting public calls for an injection of biomethane into the network.

The acquisition of half the control of ZEG Biogas came at a very favorable time, according to the executives, since the demand is increasingly high for products linked to decarbonization and the ESG agenda, along with the granting of incentives recently by the government in order to accelerate the formation of a market.

Added to this scenario is the current high prices of fossil fuels and natural gas, which benefits new business with biofuel, since the contracts are tied to Brazil’s benchmark inflation index IPCA.

“We can not only provide predictability of the delivery of the molecule, but also the guarantee that [in the case of] any shock in the world energy market, the client will not be impacted in the same proportion,” said Mr. Bragança.

The approximation started in May last year, when the two companies signed a letter of understanding to study the biogas and biomethane market, evolving into a cooperation agreement in August and to talks, at the end of 2021, for the acquisition of the equity stake.

The partnership, according to the companies, may enable the more than 300 ethanol plants that supply Vibra to access an environmentally friendly solution for vinasse.

The synergy, they point out, involves the production capacity and commercialization of biomethane of ZEG Biogas to Vibra’s network with more than 18,000 corporate clients (B2B) that seek, for example, the replacement of LPG or diesel oil, besides a network with 8,300 gas stations.

*By Fábio Couto — Rio de Janeiro

Source: Valor International

https://valorinternational.globo.com/

Vibra Energia made official on Wednesday the creation of the largest trader in the free electricity market in the country. In the wake of the multibillion transaction announced in October — which began with an investment of R$2 billion in a convertible debenture — Vibra, formely known as BR Distribuidora, confirmed its option to take over 50% of Comerc.

In addition, Vibra and Comerc’s partners — manager Perfin, founder Kiko Vlavianos and executives — also reached an agreement to invest in Targus, an energy trader controlled by Vibra since last year. With Targus, Comerc jumps from the fourth to the first position in the ranking of traders, going to 2.4 gigawatts from 1.9 gigawatts.

By adding Targus to Comerc, Vibra is already beginning to show the return of CEO Wilson Ferreira Jr.’s bet on the energy transition. A year ago, when the company bought 70% of Targus’ capital, the trader was valued at R$90 million. In the transaction with Comerc, the valuation of the company more than tripled, reaching R$303 million.

Under the terms of the transaction, Vibra injected R$2 billion into Comerc’s cash reserves in October through a debenture that will be converted into 30% of the capital. Originally, the company would invest another R$1.25 billion – in a secondary tranche – to reach 50% of Comerc’s capital, but the agreement around Targus reduced the secondary stake to R$1.1 billion.

In the negotiations with Comerc’s partners, Vibra also tied a purchase option to take control of the company between 2026 and 2028. The other Comerc partners are left with a put. When they announced the transaction in October, there was still no definition of the call and put structure.

“Another market leader is born,” Mr. Ferreira Jr. told Pipeline, Valor´s business website. The country’s largest fuel trader, Vibra does not want to lose its hegemony in the energy of the future.

Vibra has been building a multi-power platform that also aims to be a leader. In the commercialization of electric energy, it is already born as a leader in the free market with Comerc. The same logic applies to the sale of ethanol, a business that will be done in partnership with Copersucar.

With Vibra’s investment, Comerc will have the drive for an expansion that foresees R$6 billion in investments until 2025, with a capacity that should jump to 3,900 gigawatts/hour from 121 gigawatts/hour per year in five years. In distributed generation, Comerc is expected go to 550 gigawatts/hour from 157.4 gigawatts/hour.

In addition to the R$6 billion in investments already foreseen, Comerc also has a pipeline of projects that can add another 1,100 megawatts-peak. “This is an asset that was not valued in Comerc’s IPO,” says Mr. Ferreira Jr. When Vibra reached the agreement to acquire the 50% stake, the company went through the distributor’s IPO, paying a premium over what investors would pay to take Comerc to the stock exchange.

In the view of Vibra executives, the renewable power market will only grow. With the easing of barriers to entry into the free electricity market, reducing the size for the use of this format, the expectation is that 50% can be purchased on the free market in a few years, a jump over the current 33%. “This is the market that we are accessing with the transaction,” says Mr. Ferreira Jr.

Vibra will appoint three members to Comerc’s board of directors. The other partners will nominate another three. The board will also have two independent members.

Source: Valor International

https://valorinternational.globo.com

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