Braskem SA 6-K 2008
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16
OR 15D-16 OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of March, 2008
(Commission File No. 1-14862 )
(Exact Name as Specified in its Charter)
(Translation of registrant's name into English)
Rua Eteno, 1561, Polo Petroquimico de Camacari
Camacari, Bahia - CEP 42810-000 Brazil
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ___X___ Form 40-F ______
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1). _____
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7). _____
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- _____.
BASE DATE: September 30, 2007.
REQUESTING PARTY: BRASKEM S.A. (BRASKEM), with head office located at Rua Eteno, 1561, COPEC, Municipal District of Camaçari, State of Bahia, with Corporate Taxpayer Register under CNPJ no. 2.150.391/0001 -70.
OBJECT: IPIRANGA QUÍMICA S/A (IQ), with head office located at Rua Antônio Carlos, n° 434, 4° andar, parte, São Paulo, SP, with Corporate Taxpayer Register under CNPJ no. 62.227.509/0001 -29.
PURPOSE: To calculate IQs Net Equity at market value, as provided by Article 183 § 1 of Act no. 6.404/76 (Corporation Law), in order to assess the applicability of Article 256, II, b) belonging to the same Act, in function of the acquisition of IQ shares by BRASKEM.
APSIS CONSULTORIA APSIS ) EMPRESARIAL Ltda. ( was retained by BRASKEM to calculate IQs Net Equity at market value, as provided by Article 183 § 1 of Act no. 6.404/76 (Corporation Law), in order to assess the applicability of Article 256, II, b) belonging to the same Act, in function of the acquisition of IQ shares by BRASKEM.
The technical procedures employed in this report are in accordance with criteria established by appraisal standards, and appraisal calculations to determine the values of assets were done on the basis of income, asset and market discussions.
This report presents the market values of the assets and liabilities of the companies used to adjust IQs Book Net Equity by the assets approach.
ACQUISITION OF THE IPIRANGA GROUP: SUMMARY OF THE OPERATION
The Ipiranga Group was acquired by the companies PETRÓLEO BRASILEIRO S/A (PETROBRAS), BRASKEM S/A (BRASKEM) and ULTRAPAR PARTICIPAÇÕES S/A (ULTRAPAR), the latter being a commissionaire for the account and order of the former during the acquisition process. After conclusion of the acquisition, Ultrapar shall hold the distribution business of fuels and lubricants located in the South and Southeast regions (South Distribution Assets), Petrobras shall hold the distribution business of fuel and lubricants located in the North, Northeast and Midwest regions (North Distribution Assets), Braskem and Petrobras shall hold the petrochemical assets represented by Ipiranga Química S.A., Ipiranga Petroquímica S.A. (IPQ) and by the latters participation in Copesul Companhia Petroquímica do Sul (Copesul), at the rate of 60% for Braskem and 40% for Petrobras (Petrochemical Assets) . The assets related to the petroleum refinery operations held by RPI shall be equally shared among Petrobras, Ultrapar and Braskem.
As described in the Material Fact ACQUISITION OF THE IPIRANGA GROUP, published on March 19, 2007, the operation is divided into five stages, namely:
SUMMARY OF RESULTS
The figures below present an overview of IQs Net Equity at market value, as of the base date of this report:
APSIS CONSULTORIA ) APSIS EMPRESARIAL S/C Ltda. ( was retained by BRASKEM to calculate the value of IQs Net Equity at market value as provided by Article 183 § 1 of Act no. 6.404/76 (Corporation Law), in order to assess the applicability of Article 256, II, b) belonging to the same Act, in function of the acquisition of IQ shares by BRASKEM.
In preparing this report, data and information provided by third-parties were used in the form of documents and verbal interviews with the clients. The estimates used in this process are based on documents and information which include, among others, the following:
The inspections of the industrial plants were conducted in April, May and June 2007.
The APSIS team responsible for the coordination and performance of this work consists of the following professionals:
2. PRINCIPLES AND RESTRICTIONS
This report strictly complies with the fundamental principles described below.
The consultants and appraisers have no personal inclination towards the subject matter involved in this report nor derive any advantage from it.
The professional fees of APSIS are not, in any way, subject to the conclusions of this report.
The report was prepared by APSIS and nobody, other than the consultants themselves, prepared the analyses and respective conclusions.
In this report, one assumes that the information received from third parties is correct, and the sources thereof are contained in said report.
To the best knowledge and credit of the consultants, the analyses, opinions and conclusions presented in this report are based on data, diligence, research and surveys that are true and correct.
APSIS assumes full responsibility for the matter of Appraisal Engineering, including implicit appraisals, in the exercise their honorable functions, primarily established in the appropriate laws, codes or regulations.
For purposes of projection, we start with the premise of the inexistence of liens or encumbrances of any nature, judicial or extrajudicial, affecting the purpose of the relevant work, other than those listed in this report.
The report presents all the restrictive conditions imposed by the methodologies adopted, which affect the analyses, opinions and conclusions contained in the same.
This report meets the specifications and criteria established by the rules of the Brazilian Association of Technical Rules (ABNT), the specifications and criteria established by USPAP (Uniform Standards of Professional Appraisal Practice), in addition to the requirements imposed by different bodies, such as the Treasury Department, the Central Bank of Brazil, CVM (the Brazilian equivalent to the US Securities and Exchange Commission), SUSEP (Private Insurance Superintendence), etc.
APSIS declares that it does not have any direct or indirect interests in the companies contemplated in this report or their respective controllers or in the operation to which the Protocol and Justification refer, there being not relevant circumstance, which may characterize conflict or communion of interests, whether potential or current, to the issuance of this Appraisal Report.
In the course of our work, the controllers and managers of the companies contemplated in this report did not direct, limit, hinder or practice any acts, which have or may have compromised access, use or knowledge of information, property, documents or work methodologies relevant to the quality of our conclusions.
The Report was drafted in strict compliance with the postulates set forth in the Professional Code of Ethics of CONFEA Federal Council of Engineering, Architecture and Agronomy and of the Legal Institute of Engineering.
3. LIMITS OF RESPONSIBILITY
In the preparation of this report, APSIS used historic data and information audited by third parties or not audited and projected non-audited data, supplied in writing or verbally by the companys management or obtained from the sources mentioned. Therefore, APSIS assumed as true the data and information obtained for this report and does not have any responsibility in connection with their truthfulness.
The scope of this work did not include audit of the financial statements or revision of the works performed by its auditors.
Our work was developed for use by the applicants aiming at the already described objectives. It may, thus, be disclosed as part of the documents related to the corporate reorganization of BRASKEM, the mention of this work in related publications being authorized, and it may further be filed at CVM and in the Securities and Exchange Commission SEC, as well as made available to shareholders and third parties, including through the websites of the companies involved.
We highlight that the understanding of the conclusion of this report will be take place by reading it and its attachments in full. Therefore, conclusions from partial reading should not be taken.
We do not take responsibility for occasional losses to the applicant and its shareholders, directors, creditors or other parties as a result of the use of data and information supplied by the company and comprised in this report.
The analyses and conclusions contained herein are based on several premises, held on this date, of future operational projections, such as: macroeconomic factors, amounts practiced by the market, exchange rate variations, sale prices , volumes, market share, revenues, taxes, investments, operational margins, etc. Thus, future results may differ from any prediction or estimate contained in this report.
This appraisal does not reflect events and their respective impacts, having occurred after the date of issue of this report, other than those listed in Chapter 6.
4. APPRAISAL METHODOLOGY
ASSETS APPROACH NET EQUITY AT MARKET VALUE
This methodology derives from generally accepted accounting principles (PCGA), where financial statements are prepared based on the principle of historic or acquisition cost.
Due to this principle and to the fundamental principle of accounting, the book value of the assets of a company less the book value of its liabilities equals the book value of its net equity.
The application of the methodology is based on the book values of the assets and liabilities and requires adjustments to some of these items so as to reflect their probable realization values. The result of the application of this method may provide an initial basis to the calculation of the companys value, as well as a useful basis for comparison with the result of other methodologies.
On the other hand, the basic principles of economy allow us to create the following appraisal technique: the value defined for assets less the value defined for liabilities equals the value defined for a companys net equity. From an appraisal perspective, the relevant value definitions are those appropriate to the objective of the appraisal.
The assessment of assets, therefore, aims at appraising a company according to the adjustment of the book value (net balance) to their respective fair market values. The assets and liabilities deemed relevant are assessed by their fair market value, a comparison being made between this amount and its book value (net balance) .
The general appraisal criteria applied in the adjustment of assets subject to appraisal at market value are detailed in Chapter 10 of this report.
These adjustments, duly analyzed, are added to the book Net Equity value, thus determining the market value of the company by assessing the assets. The fair market value of the company will be the Net Equity value, considering the adjustments found for the assets and liabilities appraised.
It should be stressed that it was not the purpose of our work to identify and make a valuation of the assets that were not accounted for in the financial statements of the companies; nor the identification and quantification of liabilities not recorded or not disclosed by the Companies Management.
In this appraisal, the objective of the scope and methodology adopted was to appraise a going concern; therefore, the expenses incurred with the realization of the assets or enforcement of liabilities, as well as related to the bankruptcy or liquidation of companies were not considered in the calculations.
MAIN STAGES OF THE APPRAISAL
Reading and analysis of the companys balance sheets.
Analysis of the assets and liabilities accounts recorded in the companys balance sheet, to identify accounts subject to adjustments, as well as calculation and their probable market value.
Adjustments of the property, plant and equipment of the companies by their respective market value based on the equity appraisals performed by Apsis.
Application of the equity method of accounting on the net equity at market value of the subsidiaries and associated companies for calculation of the value of investments.
Calculation and market value of the companies net equity.
5. PROFILING OF THE IPIRANGA GROUP
The Ipiranga Group, one of the largest and most traditional business conglomerates in Brazil, operates in the same segments as Petrobras, Ultrapar and Braskem. It is the second largest distributor of fuels in Brazil, with a network of 4,240 stations. It also has prominent participation in the petrochemical sector, with production of circa 650 thousand tons of petrochemical resins through IPQ, in addition to sharing, with Braskem, control of Copesul the second largest center of petrochemical raw materials in Brazil. In 2006, the consolidated net revenue of the Ipiranga Group totaled R$ 31 billion, with R$ 1,0 billion of EBITDA and R$ 534 million in net profits. The figure below presents the corporate structure of the group before Stage 1 of the acquisition process:
With its origins in the first half of the XX century, the Companies of the Ipiranga Group develop activities in diverse sectors from the petrochemical industry to the production of tar, including refinery and distribution of fuels. We will present below a description of the companies that belong to the groups petrochemical segment and their respective distribution assets, object of this report.
Still within the petrochemical production sector, we can visualize in the corporate structure of the Ipiranga Group four relevant companies: (i) IPIRANGA PETROQUÍMICA S/A (IPQ); and (ii) COMPANHIA PETROQUÍMICA DO SUL (COPESUL) . We will begin with COPESUL, because it is a 1st generation industry in the petrochemical chain.
THE RAW MATERIALS CENTER - COPESUL
Copesul is a 1st generation company (also know as raw materials centers), located in Pólo Petroquímico do Sul (Southern Petrochemical Pole), Triunfo, RS, which processes naphtha, mainly, in addition to condensate and LPG to generate the basic products that feed the 2nd generation industries of the petrochemical chain.
Copesul supplies the basic petrochemicals necessary to the production of innumerable articles present in modern life. Processing raw materials derived from petroleum (naphtha, LPG, condensate), the company produces ethene, propene, butadiene, benzene, solvents and fuels, which in turn will be raw materials for four large production chains:
Thermoplastic resins chain: produced from ethene and propene by the second generation industries of Pólo Petroquímico do Sul (Ipiranga Petroquímica, Braskem, Petroquímica Triunfo and Innova), they are commercialized with the plastic transformation industries.
Elastomers chain: also produced by the companies of Pólo do Sul (Petroflex e DSM Elastômeros), they are commercialized with the rubber transformation industries.
Solvents chain: covers the industry of paints, shoes, furniture, agricultural industry and other sectors which process basic petrochemicals for the production of solvents, adhesives and others.
Fuels chain: covers fuel distributors and others.
Copesul has an installed capacity to process 3.7 million tons /year of naphtha, with flexibility to use LPG and/or light condensate. Naphtha is a hydrocarbon in liquid form, derived from petroleum, which is quite similar to gasoline. Petrobras/Refinaria Alberto Pasqualini (Refap), of Canoas (RS), is the exclusive supplier of naphtha for Copesul taken by an underground pipeline to the South Petrochemical Pole.
As Refap does not have sufficient production capacity, a part of naphtha arrives in the state by the maritime terminal of Petrobras on the northern coast. Copesuls tankage park with Petrobras/Tedut, in the municipality of Osório, has capacity for 170 thousand cubic meters and guarantees the maintenance of strategic stocks. The transfer of naphtha to Refap also occurs by an underground pipeline.
With naphtha and condensate gas, Copesul produces 3.2 million annual tons of Aromatics and Olefins, such as ethene, propene, butadiene, toluene and other solvents, gasoline and other fuels (see the produced capacity per product in the chart below) . It also produces and supplies to the other companies of the Pole utilities such as treated water (drinking, demineralized and service water), steam, hydrogen and maintenance services.
The figure below presents a summary of the production capacities per product, whose processes can be better visualized in the specific report RJ-0117/07 -8:
Production Capacity per Product (in thousand tons/year)
After the acquisition of the Ipiranga Group, COPESULs share (29.46%) held by IPQ will be owned by BRASKEM (60%) and PETROBRAS (40%).
IPIRANGA PETROQUÍMICA S/A (IPQ): THE 2ND GENERATION
Ipiranga Petroquímica (IPQ) is an industry that manufactures thermoplastic resins used in innumerable day-to-day products, such as in the manufacturing of film for packages, flasks, domestic utensils and special pipes. Ipiranga Petroquímica produces more than 700 thousand tons per year of four thermoplastic resins, the high, medium and low linear density polyethylene (PEAD, PEMD e PEBDL), and polypropylene (PP) in five industrial plants, located in Pólo Petroquímico de Triunfo RSBrazil.
You will find below a summary of the production capacities of each of the five plants, whose production processes may be better visualized in the specific report RJ-0117/07 -16:
After the acquisition of the Ipiranga Group, the operating assets of IPQ will become the property of BRASKEM (60%) and PETROBRAS (40%).
The distribution assets in connection with the petrochemical segment of the IPIRANGA Group are concentrated in the following company:
IPIRANGA QUÍMICA DISTR. QUÍMICOS (IQ) concentrates the distribution assets of petrochemical products;
IPIRANGA QUÍMICA DISTR. QUÍMICOS IQ
Responsible for the distribution of products from Empresas Petróleo Ipiranga, Ipiranga Química is one of the main distributors of chemical and petrochemical products of South America. Its infrastructure consists of three centers, three logistics bases and tanks in four Brazilian ports, scattered in the states of Rio Grande do Sul, Rio de Janeiro, São Paulo, Paraná, Pernambuco and Bahia.
The main operating assets of IQ are concentrated in three large distribution centers: (i) GUARULHOS; (ii) CANOAS and (iii) DUQUE DE CAXIAS. The description of these assets is in specific report RJ-0117/07 -17.
After acquisition of the Ipiranga Group, the operating assets of IQ will be owned by BRASKEM (60%) and PETROBRAS (40%).
PROVISION OF SERVICES: OTHER COMPANIES
The other companies of the Ipiranga Group in connection with the petrochemical segment were created to give support to the operational companies of the group, previously described, through the provision of specific services in company or use of the existing customer base. They are companies of secondary importance, without relevant operational assets, listed below by name, sector of performance and owner after acquisition:
IPIRANGA QUÍMICA ARMAZÉNS GERAIS LOGISTICS BRASKEM (60%) and PETROBRAS (40%).
ISATEC PESQUISA, DESENVOLVIMENTO E ANALISES QUIMICAS LTDA P&D BRASKEM (60%) and PETROBRAS (40%).
NATAL TRADING LTD TRADING COMPANY BRASKEM (60%) and PETROBRAS (40%).
IPIRANGA SA (ARGENTINA) TRADING COMPANY BRASKEM (60%) and PETROBRAS (40%).
IPIRANGA PETROQUIMICA CHILE LTDA TRADING COMPANY BRASKEM (60%) and PETROBRAS (40%).
IPQ PETROQUIMICA CHILE LTDA TRADING COMPANY BRASKEM (60%) and PETROBRAS (40%).
6. ACQUISITION OF THE IPIRANGA GROUP: SUMMARY OF THE OPERATION
The Ipiranga Group was acquired by the companies PETRÓLEO BRASILEIRO S/A (PETROBRAS), BRASKEM S/A (BRASKEM) and ULTRAPAR PARTICIPAÇÕES S/A (ULTRAPAR), the latter being a commissionaire for the account and order of the former along the acquisition process. After the conclusion of the acquisition, Ultrapar shall hold the distribution business of fuels and lubricants, located in the South and Southeast regions (South Distribution Assets). Petrobras shall hold the distribution business of fuels and lubricants located in the North, Northeast and Midwest regions (North Distribution Assets). Braskem and Petrobras shall hold the petrochemical assets, represented by Ipiranga Química S.A., Ipiranga Petroquímica S.A. (IPQ) and by the latters holding in Copesul Companhia Petroquímica do Sul (Copesul ), at the rate of 60% for Braskem and 40% for Petrobras (Petrochemical Assets). The assets related to petroleum refining operations held by RPI shall be shared equally by Petrobras, Ultrapar and Braskem.
As described in the Material Fact ACQUISITION OF IPIRANGA GROUP , published on March 19, 2007, the operation is divided into five stages, namely:
7. GENERAL ASSESSMENT CRITERIA
This report was prepared to assess IQs equity, according to the criteria listed below within the context of the acquisition process of the Ipiranga Group. The table below presents the general criteria defined for assessment of each account and/or group of accounts of the companies involved in the operation:
8. ASSESSMENT OF IQs NET EQUITY AT MARKET VALUE
In this report, the assets approach for assessment of IQs Net Equity at market value was adopted. In this approach, we valued the relevant assets and liabilities so as to reflect their fair market value, according to the criteria detailed in Chapter 7.
IQ is a company that presents a double function in the structure of the Ipiranga Group: (i) holding of the groups petrochemical investments; (ii) operating company, acting in the segment of petrochemical products distribution.
To arrive at IQs Net Equity at market value, therefore, it will be necessary for us to make valuations of their relevant operating assets, and also of the relevant investments in other companies of the group.
ASSESSMENT OF THE PROPERTY, PLANT AND EQUIPMENT
The assets that integrate the property, plant and equipment relating to the accounts of land, buildings/facilities and machinery/equipment are of greatest relevance within the group of operating assets of IQ. The valuation of these assets can be found in Assessment Report RJ-0117/07 -17, and is summarized in the table below:
Assessment of Exchange Position - Stage 2
VALUE ( R$ MILLION)
ASSESSMENT OF PETROCHEMICAL INVESTMENTS
For assessment of IQs Net Equity at market value, we need to assess, in addition to its property, plant and equipment, Net Equity at market value of the invested companies considered relevant.
We present below the list of companies considered relevant, with the respective specific reports of assessment of the property, plant and equipment:
IPQ Assessment Report RJ-0117/07 -16
COPESUL Assessment Report RJ-0117/07 -18
The Net Equity at market value of these companies is detailed in Attachment 1.
ASSESSMENT OF OTHER ASSETS AND LIABILITIES
For the other assets and liabilities of RPI, the criteria detailed in Chapter 7 were adopted, as shown in the calculations spreadsheets of Attachment 1.
VALUE OF IQs NET EQUITY AT MARKET VALUE
The table below presents the value of IQs Net Equity at market value on the base date, with the respective adjustments in the main accounts:
In light of the examinations conducted in the previously mentioned documentation and on the basis of APSIS analyses, the experts concluded that the value of IQs Net Equity at market value is R$ 1.275 million (one billion, two hundred and seventy -five million), on the base date of September 30, 2007.
Report RJ-0109/08 -01 being concluded, consisting of 33 (thirty-three) pages typed on one side and 03 (three) attachments and reproduced in 03 (three) original counterparts, APSIS Consultoria Empresarial Ltda., CREA/RJ 82.2.00620 -1 and CORECON/RJ RF/2.052 -4, a company specialized in the valuation of assets, legally represented below by its directors, makes itself available for any clarifications which may be necessary.
Rio de Janeiro, March 10, 2008.
/s/ ANA CRISTINA FRANÇA DE SOUZA
/s/ CESAR DE FREITAS SILVESTRE
10. LIST OF ATTACHMENTS
1. CALCULATIONS OF THE VALUATIONS
2. SUPPORT DOCUMENTATION
3. GLOSSARY AND APSIS PROFILE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 25, 2008
This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates offuture economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will a ctually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.