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Loans, borrowings, cash and cash equivalents and short-term investments
 6 Months Ended
Jun. 30, 2024
Notes and other explanatory information [abstract]  
Loans, borrowings, cash and cash equivalents and short-term investments

21. Loans, borrowings, cash and cash equivalents and short-term investments

 

a) Net debt

 

The Company monitors the net debt with the objective of ensuring the continuity of its business in the long term.

 

     
  Note June 30, 2024 December 31, 2023
Loans and borrowings   13,770 12,471
Leases 22(b) 1,360 1,452
Gross debt   15,130 13,923
       
(-) Cash and cash equivalents   6,479 3,609
(-) Short-term investments (i)   61 51
(-) Cash and cash equivalents of PTVI 15(a) - 703
Net debt   8,590 9,560

 

(i) Substantially comprises investments in an exclusive investment fund, which portfolio is made by committed transactions and Selic Treasury Notes (“LFTs”), which are floating-rate securities issued by the Brazilian government.

 

b)    Cash and cash equivalents

 

   
  June 30, 2024 December 31, 2023
R$ 1,625 953
US$ 4,620 2,516
Other currencies 234 140
Total 6,479 3,609

 

c)Loans and borrowings

 

i)Outstanding balance of loans and borrowings by type and currency

 

     
    Current liabilities Non-current liabilities
  Average interest rate (i) June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023
Quoted in the secondary market:          
US$ Bonds (ii) 6.08% - - 8,157 7,157
R$ Debentures 8.74% 33 96 82 119
Debt contracts in Brazil in (iii):          
R$, indexed to TJLP, TR, IPCA, IGP-M and CDI 10.18% 43 49 153 200
Basket of currencies and bonds in US$ indexed to SOFR 6.89% - - 150 150
Debt contracts in the international market in:          
US$, with variable and fixed interest 6.04% 645 500 4,255 3,945
Other currencies, with variable interest 4.23% - - 9 9
Other currencies, with fixed interest 4.11% 12 12 54 67
Accrued charges   177 167 - -
    910 824 12,860 11,647

 

(i) In order to determine the average interest rate for debt contracts with floating rates, the Company used the rate applicable as of June 30, 2024.

(ii) In June 2024, the Company issued bonds of US$1 billion with a coupon of 6.45% per year, payable semi-annually, and maturing in 2054.

(iii) The Company entered into derivatives to mitigate the exposure to cash flow variations of all floating rate debt contracted in Brazil, resulting in an average cost of 3.22% per year in US$.

 


The reconciliation of loans and financing with cash flows arising from financing activities is presented in note 9(C).

 

ii)Future flows of principal and interest of loans and borrowings payments

 

   
  Principal

Estimated future

interest payments (i)

2024 176 423
2025 892 865
2026 560 811
2027 1,689 714
Between 2028 and 2030 3,326 1,805
2031 onwards 6,950 3,744
Total 13,593 8,362

 

(i) Based on interest rate curves and foreign exchange rates applicable as of June 30, 2024 and considering that the payments of principal will be made on their contracted payments dates. The amount includes the estimated interest not yet accrued and the interest already recognized in the annual financial statements.

 

Covenants

 

Some of the Company’s loans and borrowings agreements with lenders contain financial covenants. The primary financial covenants in those agreements require maintaining certain ratios, such as leverage ratio and interest coverage. The Company did not identify any instances of noncompliance as of June 30, 2024.