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Brazilian Cemig issues update on its disinvestment programme [free access]

July 11, 2017

Brazil's state-run utility Companhia Energética de Minas Gerais (Cemig) has issued an update on its disinvestment programme, which was announced on June 1, 2017. Under the revised version, the company is planning to raise more than BRL8 billion, about 1.2 per cent higher than the amount announced under the original plan.

 

Under this, Cemig has planned to sell off 19 per cent stake in Transmissora Aliança de Energia Elétrica SA (TAESA), which has a book value of BRL1,384 million; 25 per cent stake in Transmineria Transmissao Mineira, which has a book value of BRL77 million; 18 per cent stake in Santo Antonio Energia, which has a book value of BRL1,278 million; 43 per cent stake of Light SA, which has a book value of BRL2,060 million; 49 per cent stake in Cachoeirão, Pipoca, Paracambi hydro dams, which have a book value of BRL127 million; 49 per cent stake of Companhia de Gás de Minas Gerais S.A. (GASMIG), which has a book value of BRL1,202 million; 100 per cent stake of Cemig Telecomunicações SA, which has a book value of BRL193 million; 12 per cent stake of Norte Energia SA, which has a book value of BRL1,392 million; and 24.5 per cent stake in gas exploration concessions, which has a book value of BRL16 million.

 

Recently, the Board of Directors of Cemig approved a stockholding restructuring to transfer to TAESA its stockholding interests in three public electricity transmission concession holders – Companhia Transleste de Transmissão S.A. (Transleste), Companhia Transudeste de Transmissão S.A. (Transudeste), and Companhia Transirapé de Transmissão S.A. (Transirapé). The transaction is subject to final consideration by the Board of Directors of TAESA. The transaction will also be submitted for approval to the anti-trust authorities, including the Brazilian business administration watchdog Conselho Administrativo de Defesa Econômica (Cade), and other authorities like energy regulator Agencia Nacional de Energia Eletrica (ANEEL) and Banco Nacional de Desenvolvimento Econômico e Social (BNDES) or the National Development Bank of Brazil.

 

In another development, Brookfield Energia Renovável S.A. has proposed a non-binding offer to Cemig for acquisition of the equity interest held by Light Energia S.A. (a subsidiary of Light SA) in Renova Energia S.A., and, also for capitalisation of Renova.

 

(BRL1=USD0.31)