Capital Structure

In line with the strategy of optimizing its capital structure, CTEEP obtained resources to finance its growth through competitive market sources.

The Brazilian Development Bank (BNDES) approved the release of R$ 329.1 million for the Triennial Investment Plan 2008-2010, which includes investments in reinforcements, new connections and maintenance of the company’s operations. The charges are set at Long Term Interest Rate (TJLP) plus 1.8% per year, and amortization will be in 54 monthly installments as of January 2011, with charges paid quarterly until the commencement of amortization.

The company ended 2008 with total debt of R$ 856.8 million and net debt of R$ 733.7 million, representing a debt/EBITDA ratio of 0.56.
In December 2008, the company issued Promissory Notes to the sum of R$ 200.0 million, at the cost of 120% of the Interbank Deposit Certificate rate (CDI), maturing in June 2009.

Of the total debt, 70.4% is related to the BNDES loan, with the remainder from other financial institutions. At the close of 2008, 60.0% of the company’s total financing was long term and indexed to the TJLP, and 40.0% was short term, of which 27.3% was indexed to the TJLP. The company does not use derivatives, either in policy or in practice.