SAO PAULO (Reuters) - The No. 1 shareholder in Cia Energética de Minas Gerais SA has decided to oust Chief Executive Bernardo Alvarenga and three senior executives after the debt-laden power utility lost control of four dams and took too long to shed assets, two people directly involved in the matter said on Friday.
The Brazilian sate of Minas state, which has 51 percent voting control of the utility known as Cemig, will announce the ouster of Alvarenga and three senior vice presidents after their replacements have been found, one of the people said.
Cemig’s media office said it was unaware of the information. Efforts to speak to Alvarenga and executives Dimas Costa, Cesar Vaz and Maura Galuppo Martins were unsuccessful.
Common and preferred shares accelerated losses on Friday afternoon trading, shedding 0.8 percent and 1.2 percent to their lowest levels in about three months. Both stocks are down 7 percent and 3 percent this year, respectively.
Alvarenga’s performance as head of Brazil’s third-largest utility has been “disappointing,” the person said, citing the thinking of Minas Gerais state officials including Governor Fernando Pimentel. Pimentel hired Alvarenga in December to speed up an ambitious debt-reduction and asset-sale program that has struggled to take off.
According to the person, a group of potential candidates for Alvarenga’s replacement has been drafted, with the favorite being Mauro Pereira Bueno Meinberg, a former CEO of real estate developer Rodobens Negócios Imobiliários SA. Calls to Meinberg’s mobile phone for comment were not immediately taken.
Dissatisfaction with Alvarenga and the other executives mounted in recent weeks after Minas state’s partner in Cemig’s controlling bloc, AGC Energia SA, decided to exit the company, the person said. Alvarenga’s team also failed at a government auction this week to retain the Miranda, São Simão, Jaguara and Volta Grande dams.
Vaz is a longtime vice president for Cemig’s new business division, which is in charge of the utility’s mergers and acquisitions strategy. Costa is Cemig’s senior vice president for sales. Galuppo Martins is a vice president in charge of human resources.
Reporting by Guillermo Parra-Bernal and Luciano Costa; Editing by Andrew Hay