BRASILIA, Dec 21 (Reuters) - Cia Energética de Minas Gerais SA has picked Bernardo Salomao as its new chief executive officer as part of a management overhaul that aims to speed up a debt-reduction plan, the power company said in a filing on Wednesday.
The company said it has also appointed Paulo Castellari as its new chief financial officer. Both appointments will take effect on Thursday.
Reuters reported earlier this week that the company’s board had decided to replace current CEO Mauro Borges and CFO Fabiano Maia amid growing tensions with the state of Minas Gerais, Cemig’s main shareholder, over plans to sell assets.
With his state under self-declared “financial calamity,” Governor Fernando Pimentel was at odds with management over the pace of the sale of some assets to help cut Cemig’s 16.3 billion-real ($4.8 billion) debt
Shares of Cemig have rallied this week as investors are optimistic the new management will make good on promises to sell assets to reduce one of the heavy burdens in the Brazilian power industry.
Cemig has been the center of battles between the state of Minas Gerais and investors in the past. In 1999, former Minas Governor Itamar Franco wrested control of Cemig from AES Corp and Southern Co in courts, saying the privatization process by which the firms took over the utility was questionable. $1=3.42 reais (Reporting by Tatiana Bautzer; Writing by Alonso Soto; Editing by Sandra Maler and Jonathan Oatis)