Oaktree Capital Management LP has come up with a non-binding proposal to take control of Renova Energia SA (BVMF:RNEW11) just a few days after the Brazilian renewables firm got a bid from another suitor, Reuters reports.
The Los Angeles-based investor has offered to pay BRL 170 million (USD 52m/EUR 45.5m) for the 16% stake in Renova held by Light Energia SA, part of Light SA (BVMF:LIGT3), and pour an additional BRL 1.2 billion to dilute the controlling bloc. Moreover, Oaktree plans to refinance Renova loans that mature in 2017, two sources told the news agency on Wednesday.
Late on Tuesday, Renova confirmed that it has received a non-binding offer from a unit of Brookfield Asset Management Inc (TSE:BAM.A) after Reuters reported that the Canadian asset manager had proposed to pay BRL 200 million for Light’s interest and provide a further BRL 800 million in fresh capital.
Renova’s other major shareholders are Cia Energetica de Minas Gerais SA (BVMF:CMIG4), or Cemig, and RR Participacoes SA. The company has been having financial difficulties since a partnership agreement with now bankrupt SunEdison Inc (OTCMKTS:SUNEQ) fell through last year.
One of Oaktree's specialties is investing in distressed debt and the company also has a fair number of deals in the renewable energy sector, including investments in Abengoa SA (BME:ABG), Ten K Solar Inc, Solarrus Corp and Array Technologies Inc.
According to one of Reuters’ sources, the Oaktree proposal could cut Renova's short-term debt by 6% and, at the same time, strengthen capital by at least 13%. This depends on the completion of the 400-MW Alto Sertao III wind park.
(BRL 1.0 = USD 0.304/EUR 0.267)
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