- Majority stake in Celg-D may be sold for at least $367 million
- Selling distributors would boost utility's balance sheet
Shareholders of Brazil’s state-owned utility Eletrobras authorized the company to sell its majority stake in its biggest energy-distribution company as the government seeks to bolster cash and ease a growing fiscal deficit.
Eletrobras plans to sell its 51 percent stake in Celg Distribuicao SA for at least 1.43 billion reais ($367 million), according to a statement. The distributor known as Celg-D serves 7 million people in Goias state.
Centrais Eletricas Brasileiras SA, as Brazil’s biggest electric utility is formally known, is seeking to sell some operations as part of a government effort to raise cash. Brazil withdrew about a third of the assets from its $620 million sovereign wealth fund last week as the government struggles to shore up public accounts that have been hit by the deepest economic recession in 25 years.
“Now we will open our books and the company can be auctioned in March,” Sinval Zaidan Gama, Celg-D’s chief executive officer, said in a telephone interview from Goiania, in Goias state. “Eletrobras will be able to have more cash.” Shareholders delayed a scheduled vote to authorize the sale of six other distributors.
Companies including Enel SpA and State Grid Corp. of China have already shown interest in buying Celg-D. Regulators and executives had already approved the sale.
Celg-D has faced growing liabilities this year as the real slumped and the company’s dollar-denominated loans reached more than a half of the company’s total debt of 2.5 billion reais. In November, Brazil’s government approved a stopgap measure to convert the distributor’s dollar debt into reais. That also extended the maturity to 10 years from two years, Gama said.
Eletrobras had a net loss of 4.01 billion reais in the third quarter. In September, Brazil’s Energy Minister Eduardo Braga said that getting rid of the unprofitable distributor would boost Eletrobras’s balance sheet by 80 million reais a month.