Cesp Takeover Seen on Decision to Cut Revenue: Corporate Brazil
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Cia. Energetica de Sao Paulo’s decision to give up half its power plants is fueling speculation the state-run utility may be sold after three failed attempts.
Cesp, as Brazil’s second-biggest power generator is known, has gained 11 percent this month, the most among Brazilian utilities, after saying it won’t renew contracts accounting for 70 percent of its revenue under new rules outlined by the government last month. The refusal means Cesp can cut debt and boost investor returns, said Cristiane Fensterseifer, an analyst at Porto Alegre, Brazil’s Geracao Corretora de Valores, which manages 6 billion reais ($2.9 billion) of stocks.