Economic-financial performance | Economic-financial processes | Debt management
Fibria made important progress during the 4Q09 in its strategy for managing its financial liabilities, bringing the maturities on its loans into line with its cash generation and improving its capital structure. The company will continue to manage its indebtedness in such a way as to be able to regain its investment grade rating and to follow through with its growth strategy whenever the market conditions are favorable.
The sale of the Guaíba Unit represented the first stage of the implementation of this plan. The contract value of the sale, of US$ 1,430 million, was adjusted by around US$ 48 million, in relation to US$ 20 million of leased assets (without effecting cash) and US$ 28 million of amounts retained for the purpose of adjusting the physical forest inventory, which are still to be confirmed. Hence, the recorded amount of the sale, of R$ 2,416 million, generated a capital gain of R$ 33,414,000, which was recorded under other operating revenue (expenses).
In line with this strategy, in October 2009, the company raised funding from abroad, through a US$1.0 billion securities issue, with a 10-year maturity and a half-yearly coupon of 9.25% p.a, and in December 2009 raised a further US$ 1.175 billion through export pre-payments, in two tranches: (i) US$ 750 million over 5 years, with a 3-year grace period; and (ii) US$ 425 million over 7 years, with a 5-year grace period, both of which are indexed to the 3-month Libor, plus spreads of 4.00% p.a. and 4.25% p.a., respectively.
The total sum of US$ 3.6 billion, raised under the plan, was used to settle in advance US$ 2.1 billion of derivative debt and cover debts maturing in 2010 and 2011, including the debt arising from the acquisition of Aracruz. At the same time, the company concluded the negotiations to bring the contractual terms for the remaining amount of its debt arising from derivative transactions into alignment with those of its other contracts. As a result, a whole series of restrictive conditions still contained in the derivative debt contract were eliminated. The balance of the principal amount of this debt, as at December 31, 2009, was R$ 890 million, due to the early settlement mentioned above. The remaining amount will only be amortized as from 2015.