Cemig becomes obstacle in Brookfield-Renova talks - report

Wind farm in Brazil. Author: Suzlon Group. License: All Rights Reserved.

July 14 (Renewables Now) - Brookfield Asset Management’s (TSE:BAM.A) plan to acquire Renova Energia (BVMF:RNEW11) could be ruined by demands from a large stockholder to participate in the turnaround of the Brazilian renewables firm, Reuters reports.

Brazilian utility Cia Energetica de Minas Gerais SA (BVMF:CMIG4), better known as Cemig, does not want to give up management of Renova, three people familiar with the matter told the news agency. Instead, the company, which currently owns a 34.2% stake in Renova, wishes to take part in a Brookfield-led turnaround, according to two of the sources.

Reuters said on Friday that Canadian asset manager Brookfield has proposed to acquire the combined 63.5% interest in Renova held by Cemig, Light SA (BVMF:LIGT3) and RR Participacoes SA for BRL 810 million (USD 252m/EUR 221m), before investing an additional BRL 800 million for full management rights.

Earlier this month, the news agency reported that Oaktree Capital Management LP had also come up with a non-binding proposal to take control of Renova, offering BRL 170 million for Light’s 16% stake plus an additional BRL-1.2-billion investment.

Reuters now says, citing two of the people, that Cemig intends to gauge interest from Oaktree and two other unidentified funds in Renova.

(BRL 1.0 = USD 0.311/EUR 0.273)

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