OHL secures R$1bn in bridge loans for five toll roads

The firm’s Brazilian toll road subsidiary will use the money to keep capital expenditures flowing on five federal toll road concessions it was awarded in 2007. Approximately half the amount has already been disbursed and the remainder will be paid out before the end of the year.

Brazil’s development bank BNDES (Banco Nacional de Desenvolvimento Social) will provide R$1 billion (€367 million; $516 million) in bridge financing to five federal toll road concessions operated by OHL Brasil, the firm said in a statement.

Three of the five concessions have already received R$476.7 million of the bridge loan financing. These include the Autopista Régis Bittencourt, which has received R$190.8 million, the Autopista Fernão Dias, which has received R$139.7 million, and the Autopista Litoral Sul, which has received R$ 146.2 million.

Additional bridge loans for these three toll roads will bring their total bridge financing to $756.4 million, OHL said.

The interest on the 18-month bridge loans is the TJLP plus 2.8 percent, with a maximum of 3.58 percent, OHL said. The TJLP, or the Taxa de Juros de Longo Prazo, is a long-term interest rate that BNDES uses to price loans. Most recently, it stood at 6.25 percent.

Two other OHL highway concessions are pending approval for bridge loan financing from BNDES. They are the Autopista Planalto Sul and the Autopista Fluminense. They will receive about R$244 million from BNDES, bringing the bank’s total bridge financing for the five toll roads to R$1 billion.

OHL's toll road concessions: on the move again thanks to BNDES

The total capital expenditure for the five roads is estimated to be R$4.8 billion in the first six years of the 25-year concessions, which were signed last February. Of that amount, BNDES has agreed to provide R$3.2 billion in the form of long-term loans, with the remainder coming from OHL in the form of equity.

Alessandro Scotoni Levy, investor relations manager for OHL Brazil, said money is being provided by BNDES now so that work on the toll roads won’t stop. The firm had originally been hoping to complete the construction of 29 toll plazas on the roads by August 2008. But permitting, environmental and construction delays upended that timetable, making bridge financing necessary to the projects going.

The bridge loans will eventually be refinanced with long-term loans from BNDES, Levy said. Negotiations with BNDES are ongoing, he added.

OHL Brasil, the local subsidiary of Spanish infrastructure developer and concessionaire OHL, has a portfolio of 9 toll roads in the Latin American country. Four are concessions granted by the state of São Paulo the firm bought on the secondary market from construction firms between 1998 and 2000 and the remainder are the five above-named federally-granted concessions, which the OHL Brasil won in an auction in 2007.

The firm recently declared revenues of R$238.5 million for the first quarter of 2009 – a 39.6 percent increase over the same period last year – and earnings before interest, tax, depreciation and amortisation (EBITDA) of R$94.6 million. 

The federal concessions, which are undergoing heavy capital expenditures, posted negative EBTIDA of R$26.2 million.