July 12, 2017 / 8:11 PM / 4 months ago

Canada's Brookfield in talks to buy J&F power lines, sources say

SAO PAULO (Reuters) - Canada’s Brookfield Asset Management has signed an exclusivity agreement to acquire power transmission lines owned by Brazil’s J&F Investimentos SA, which is selling off assets to pay a record corruption-related fine, two people with knowledge of the matter said on Wednesday.

People walk to Brookfield Place off Bay Street on the day of the annual general meeting for Brookfield Asset Management shareholders in Toronto, May 7, 2014. Brookfield Asset Management said on Wednesday its cash flow slumped 29 percent in the first quarter due to a decline in realized gains from asset sales, but the result beat estimates and the company raised its dividend by 7 percent. REUTERS/Mark Blinch (CANADA - Tags: BUSINESS) - RTR3O6U7

According to one of the people, Brookfield is offering up to 1 billion reais ($311 million) for the majority stake that J&F’s electricity unit Ambar Energia Ltda has in an 880 kilometer-long (547 miles) grid of transmission lines.

Revenue from the lines, which have 30-year contracts, renders Ambar Energia annual revenue of about 90 million reais, according to data from electricity industry watchdog Aneel.

Brookfield was not immediately available to comment while J&F declined to comment.

J&F is accelerating the pace of talks to sell assets as creditors pressure leading shareholders Joesley and Wesley Batista to renegotiate more than 30 billion reais their companies - including JBS SA - amassed in recent years. JBS is the world’s No. 2 food processing company.

Both siblings signed in May plea and leniency deals related to their involvement in a massive corruption scandal in Brazil. Prosecutors imposed a world-setting record 10.3 billion-real fine on J&F and the brothers, who admitted to bribing 1,900 politicians to win businesses in recent years.

($1 = 3.2101 reais)

Reporting by Tatiana Bautzer; Editing by Guillermo Parra-Bernal and Diane Craft

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