Cemig Concludes Capim Stake Purchase - Analyst Blog
May 31 2013 - 6:58PM
Zacks
In a recent announcement, Companhia Energetica de Minas
Gerais (CIG), also known as
CEMIG, communicated that it has completed the
purchase of an additional stake in Brazil’s energy consortium,
Capim Branco Energia Consortium.
The deal was originally announced in Dec 2012 and moved a step
forward after a final deal was struck in Mar 2013 between Cemig
Capim Branco Energia S.A, a wholly owned subsidiary of Cemig, and
Suzano Papel e Celulose S.A. and subsidiaries, one of the largest
paper and pulp companies in Brazil.
As agreed upon, Cemig Capim purchased its share of Suzano’s 17.9%
stake in Capim Branco Energia Consortium. Suzano’s stake in the
consortium represented 81MW of installed capacity at the Amador
Aguiar I and II hydroelectric plants. The 17.9% stake sale has been
valued at approximately R$320 million (or R$311 million after some
adjustments) while Cemig’s share (30.3%) is worth R$97 million (or
R$94 million after adjustments).
The stake purchase has increased Cemig’s interest in Capim Branco
from its previous 21.1% stake.
CEMIG is one of the largest integrated electric utilities in Brazil
with approximately 97% of the company’s installed generation
capacity being hydroelectric power. The Zacks Consensus Estimate
for the year 2013 is at US$1.41 per ADR while at US$1.46 per ADR
for 2014. These represent a year-over-year decline of 42.5% for
2013 and growth of 3.8% for 2014.
CEMIG currently has a Zacks Rank #3 (Hold). Other stocks to watch
out for in the industry are Companhia Paranaense de
Energia (ELP) and CPFL Energia S.A.
(CPL), each with a Zacks Rank #1 (Strong Buy) while ALLETE,
Inc. (ALE) with a Zacks Rank #2 (Buy).
ALLETE INC (ALE): Free Stock Analysis Report
CEMIG SA -ADR (CIG): Free Stock Analysis Report
CPFL ENERGI-ADR (CPL): Get Free Report
COPEL-ADR PR B (ELP): Free Stock Analysis Report
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