Monday, October 22, 2018

Only one tenderer, Sao Paulo Energy takes control of Cesp with 2.09% premium to

After four failed attempts in recent years, the Government of São Paulo finally managed to realize the privatization auction of Companhia Energética de Sao Paulo (Cesp), at the headquarters of B3, in São Paulo. Only one tenderer has submitted a proposal, the São Paulo Energy Consortium, formed between Votorantim Energy companies and the Canada Pension Plan Investment Board (CPPIB), who already have a joint venture. The partners offered R $14.60 per share of the company, which represents a premium of 2.09% the minimum price of $14,30/action. The control pad on sale includes 116.4 million shares owned by the São Paulo State Government-corresponding to 40.6% of Cesp-87.5 million common shares being registered (ON) and preferred shares class B 28.9 million (GNP). With that, the Consortium will pay R $1.699 billion for slice of control. The group will need the minority to participate in the tender offer (OPA). The value of the acquisition can get around R $4.8 billion. Additionally, the consortium must still pay R $1.397 billion renewal of the concession granting the Porto Primavera power plant for 30 years, until 2048. The current lease agreement expires in 2028. A court decision published Thursday, 18, put at risk the renewal of that lease. The Federal Court of Presidente Prudente (SP) suspended the process of renewal of the concession agreement of the Porto Primavera dam, attending to a request of a public civil action filed by the law firm Office Gabbidon on behalf of Union of Energy workers of the State of São Paulo in Brazil. The São Paulo State Government ran morning to reverse the sentence of judge Newton Joseph Hawk, the second Federal Court of Presidente Prudente, and obtained by the Federal Regional Court 3rd region an injunction to suspend the effects of the judge's sentence. In addition to the Porto Primavera power plant, located on the Paraná River, Cesp operates two hydroelectric plants, Paraibuna, Rio Jaguari and Paraiba, whose leases expire in 2020 and 2021, respectively. Together, the three plants totaled 1,654 MW of installed capacity. Only Porto Primavera responds by 1540 MW. The joint venture between Votorantim energy and the CPPIB, constituted in December 2017, represented the first investment in Canadian Fund infrastructure in Brazil. At the time, the head of the CPPIB Infrastructure in Latin America, Ricardo Szlejf, had announced the expectation to invest at least R $3 billion in assets operational or under development in power generation in the country. Although the company started with projects in wind power segment, the Executive indicated the plan to diversify sources, seeking solar and hydraulic projects too-large or small, given the expertise of Votorantim in hydroelectric plants. LETÍCIA/COLABOROU FUCUCHIMA
O Estado de S. Paulo - 19/10/2018 News Item translated automatically
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