1) Trafigura and Mubadala will invest $400 million in Sudeste Port and become 65% shareholders, with MMX retaining a 35% minority stake.
2) Sudeste Port will assume MMX's mining and port debts totaling around $2.8 billion.
3) The transaction provides funding to complete the Sudeste Port and secures MMX 7 million tonnes of annual shipping capacity, expandable to 13 million tonnes.
4) MMX will have the option to increase its stake in the port up to 42.5% and will benefit from future port cash flows while focusing on its mining assets.
2. NOTICE
This presentation relating to MMX Mineração e Metálicos S.A. (“MMX”) includes “forward-looking statements”, as that term is
defined in the Private Securities Litigation Reform Act of 1995, in Section 27A of the Securities Act of 1933 and Section 21E of the
U.S. Securities Exchange Act of 1934. All statements other than statements of historical facts are statements that could be deemed
forward-looking statements and are often characterized by the use of words such as “projects”, “expects”, “anticipates”, “intends”,
“plans”, “believes”, “estimates”, “may”, “will”, or “intends”, or by discussions or comments about our objectives, strategy, plans or
intentions and results of operations. Forward-looking statements include projections regarding our operating capacity, operating
expenditures, capital expenditures and start-up dates.
By their nature, these forward-looking statements involve numerous assumptions, uncertainties and opportunities, both general
and specific. The risk exists that these statements may not be fulfilled or, even if they are fulfilled, the results or developments
described in such statements may not be indicative of results or developments in future periods. We caution participants of this
presentation not to place undue reliance on these forward-looking statements as a number of factors could cause future results to
differ materially from these statements.
Forward-looking statements may be influenced in particular by factors such as the ability to obtain all required regulatory approvals
on a timely basis or at all, exploration for mineral resources and reserves, difficulty in converting geological resources into mineral
reserves, and changes in economic, political and regulatory conditions. We caution that the foregoing list is not exhaustive. When
relying on forward-looking statements to make decisions, investors should carefully consider these factors as well as other
uncertainties and events.
MMX does not undertake to update our forward-looking statements unless required by law. This presentation is neither an offer to
sell (which can only be made pursuant to definitive offering documents) nor a solicitation of an offer to buy any securities in the
United States, or any other jurisdiction. The securities referred to herein have not been registered in any jurisdiction, and in
particular, will not be registered under the U.S. Securities Act of 1933, as amended, or any applicable state securities laws and may
not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.
This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in
part without MMX’s prior written consent.
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3. SUMMARY OF THE TRANSACTION
TRAFIGURA AND MUBADALA (Investors)
Capital injection of USD400 million in Sudeste Port
Investors to become shareholders of Sudeste Port with a 65% shareholding
MMX to keep a minority stake of 35% in Sudeste Port
SUDESTE SUPERPORT (PortCo)
In addition to the current debt of Sudeste Port (~BRL1.5 billion), Portco will assume practically all bank
debt of MMX Sudeste Mineração S.A., which sums up to approximately BRL1.3 billion
Sudeste Port will secure MMX a port shipping volume capacity of 7 million tonnes per year, which may be
increased up to 13 million tonnes per year until July 2015
− If the port is expanded, the referred volume will be increased proportionally
Sudeste Port assumes the obligation to pay the royalties payment on MMXM11 securities, including the take
or pay, by issuing PORT11 securities
Possible interim funding for PortCo if Trafigura deems it necessary (up to USD50 million, via debt)
MMX S.A.
Bridge loan to be granted by Trafigura of up to USD100 million
MMX shall have an option to acquire an additional stake of up to 7.5% in PortCo, for a final stake of up to
42.5%
Note: Debt amount as of June 2013
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4. BENEFITS OF THE TRANSACTION
1
PROVIDES THE RESOURCES NEEDED TO COMPLETE OF THE SUDESTE PORT;
2
SUDESTE PORT TO BENEFIT FROM THE TRADING KNOW-HOW OF TRAFIGURA;
3
PROVIDES SOLUTION FOR MMX’S DEBT;
4
MMX TO KEEP MINORITY STAKE OF 35% IN THE PORT BENEFITING FROM THE FUTURE CASH
FLOW OF SUDESTE PORT;
5
SUDESTE PORT TO SECURE MMX WITH PORT SHIPPING VOLUME OF 7 MILLION TONNES PER
6
MMX WILL HAVE THE OPTION TO INCREASE ITS STAKE IN THE PORT BY 7.5%.
YEAR, WITH AN OPTION TO INCREASE IT TO 13 MILLION TONNES PER YEAR;
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5. PRE-DEAL STRUCTURE
MMXM11
94.5%
MMX Corumbá
Mineração
100%
Holders of
MMXM11
100%
MMX Sudeste
Sudeste Superport
Mine debt
Port debt
~BRL1.3 billion
~BRL1.5 billion
Note: Debt amount as of June 2013.
This structure does not include all controlled companies of MMX S.A.
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6. STRUCTURE AS OF CLOSING DATE
$
PORT11
Security issued by
PortCo and subscribed
entirely by MMX S.A.
MMXM11
94.5%
MMX Corumbá
Mineração
100%
MMX Sudeste
35%
65%
PortCo
$
PORT11 SECURITY
Port debt
Mine debt
+ USD400mn
$
Financial flow dedicated exclusively to payment of royalties
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7. STRUCTURE AFTER EXCHANGE
OFFER TRANSACTION
MMXM11
PORT11
FLOW TO HOLDERS OF PORT 11
FLOW TO HOLDERS OF MMXM11
(JOIN EXCHANGE OFFER)
(DO NOT JOIN EXCHANGE OFFER)
MMXM11
$
Free Float
$
EB /
Investors
66%
Free Float
$
$
FIP-IE
EB /
Investors
34%
100%
$
FIP-IE
34%
66%
$
PORT11
SECURITY
$
PORT11
SECURITY
$
PortCo
$
PortCo
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8. EXCHANGE OFFER
MMXM11
EXCHANGE OFFER
MMX creates an equity investment fund (FIP-IE) to
hold 100% of PORT11 securities
Voluntary offer to exchange MMXM11 for
equivalent in quotas in FIP-IE
−
MMX will cancel MMXM11 received in
exchange for quotas in FIP-IE
Those who do not adhere to the offer will continue
to hold MMXM11
Meeting of MMXM11 bondholders to adopt a
compatible PORT11 indenture: remuneration shall
be payable whenever Portco has sufficient gross
profits minus (i) CAPEX maintenance, (ii)
operating expenses, (iii) service and amortization
of the senior debt; and (iv) amounts necessary for
debt service reserve account of BNDES in an
amount of up to a limited number of months
PORT11
BENEFITS OF PORT11 SECURITY
The USD5 per tonne (adjusted by PPI since
September 2010) as per the MMXM11 indenture
is preserved.
Take or pay volumes kept at same terms as set
on MMMXM11 securities public offering (2013:
13.6Mt, 2014: 31.9Mt, 2015-2016: 36.8Mt,
2017-2033: 27.2Mt)
Migration to adequate structure
−
PORT11 issued by company responsible for
port services that generates cash flows for
payment of such security
−
66% of security holders have already
assumed the obligation to migrate
(Investors and EB)
Listing of shares in FIP-IE
−
Enables acquisition of a security issued by a
closely held company
−
Greater governance to ensure an adequate
return on the security
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