(Adds details, share performance, comments throughout)
By Luciano Costa and Guillermo Parra-Bernal
SAO PAULO, April 12 Cia Energética de Minas
Gerais SA will speed up efforts to renegotiate loans and divest
electricity generation, transmission and distribution assets, as
Brazil's No. 3 power utility faces 8.7 billion reais ($2.8
billion) worth of debt maturities by the end of next year.
Cemig, as the utility is known, will reduce capital spending
for this year after last year incurring large licensing payments
for several hydropower dams, Chief Financial Officer Adézio Lima
said at a conference call to discuss fourth-quarter results.
The utility, controlled by Brazil's Minas Gerais state, is
exiting some segments while revamping power generation,
renewable energy and transmission operations. Its debt has
tripled to 13.1 billion reais since 2012, when a federal
government decision to renegotiate power contracts brought
about a decline in the value of electricity assets and hampered
Eighty percent of Cemig's debt comes due by 2019. Reuters
reported in March that Minas Gerais wants Cemig to cut debt by
selling majority stakes in generation, transmission and
distribution units, and exiting most of the 26 percent direct
stake it has in Light SA.
A combination of softer debt repayment terms and proceeds
from asset sales should help bolster its credit situation in
coming quarters, Lima said. A sale of Light shares is under
analysis, while talks with an unidentified bidder to exit a
stake in the Santo Antonio dam remain on track, Lima said,
disputing news reports that they had collapsed.
"We have a divestiture plan that the board approved in
March," Lima said, without elaborating.
However, Cemig's divestiture plans are taking longer than
those of rivals, underscoring the difficulties of downsizing a
company that grew too big, too fast in recent years. Many
Cemig's takeovers in recent years, spanning the
telecommunications to gas distribution sectors, have delivered
Cemig lost 299 million reais in the fourth quarter, compared
with a profit of 566 million reais the year earlier. Brazil's
harshest recession on record stoked delinquencies and laid bare
operational inefficiencies that weighed down Cemig's revenue in
Preferred shares, Cemig's most widely traded
class of stock, dropped the most in three weeks on Wednesday,
shedding as much as 5.5 percent. Expectations of faster asset
sales have bolstered the stock 24 percent this year.
($1 = 3.1500 reais)
(Editing by Andrew Hay and Steve Orlofsky)