August 27, 2019 / 9:56 PM / 2 months ago

Brazil's Cemig privatization plan could pass within six months: CEO

NEW YORK (Reuters) - State approval for the privatization of Brazilian power company Companhia Energetica de Minas Gerais (CMIG4.SA), known as Cemig, may take “at the maximum” six months, Chief Executive Officer Cledorvino Belini said on Tuesday.

FILE PHOTO: The company logo of Cemig is displayed on a screen on the floor of Brazil's B3 Stock Exchange in Sao Paulo, Brazil, July 25, 2019. REUTERS/Amanda Perobelli

Belini, speaking at the New York Stock Exchange before ringing the closing bell, said there was no set time line once the Minas Gerais state government sends the plan to the legislature for approval. But he added the state would require about half a year to convince legislators it should sell off its controlling stake in the company.

“In my view, the time line necessary for that to occur would be at the maximum six months,” Belini said.

Earlier this month, Belini said approval could come by the end of the year.

Analysts have said a positive outcome for Minas Gerais Governor Romeu Zema’s effort to privatize Cemig is far from a sure thing given that it would need to be approved either by a three-fifths vote of the state legislature or a popular referendum.

Zema is expected to send the project to the state legislature soon, said Cemig Chief Financial Officer Mauricio Fernandes, who did not specify a date.

Fernandes also said Cemig was keeping its financing options open both in the local and foreign markets, while also looking to purchase older debt.

“It is cheaper to transact (in Brazil) than abroad, but at the same time we keep both options because we also recognize the importance of the market here (in New York),” he said.

He said some of the proceeds of the sale of Cemig’s stake in Light (LIGT3.SA) were being used to purchase bonds in the secondary market.

“We don’t have just one route to follow. We have the options of maybe repurchasing, at the same time launching a new bond and giving investors an option to exchange,” Fernandes said.

Reporting by Rodrigo Campos; Additional reporting by Luciano Costa in Sao Paulo; Editing by Grant McCool, Christian Plumb and Peter Cooney

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