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In a recent announcement, Companhia Energetica de Minas Gerais (CIG - Analyst Report), also known as CEMIG, communicated that it has completed the purchase of an additional stake in Brazil’s energy consortium, Capim Branco Energia Consortium.

The deal was originally announced in Dec 2012 and moved a step forward after a final deal was struck in Mar 2013 between Cemig Capim Branco Energia S.A, a wholly owned subsidiary of Cemig, and Suzano Papel e Celulose S.A. and subsidiaries, one of the largest paper and pulp companies in Brazil.

As agreed upon, Cemig Capim purchased its share of Suzano’s 17.9% stake in Capim Branco Energia Consortium. Suzano’s stake in the consortium represented 81MW of installed capacity at the Amador Aguiar I and II hydroelectric plants. The 17.9% stake sale has been valued at approximately R$320 million (or R$311 million after some adjustments) while Cemig’s share (30.3%) is worth R$97 million (or R$94 million after adjustments).

The stake purchase has increased Cemig’s interest in Capim Branco from its previous 21.1% stake.

CEMIG is one of the largest integrated electric utilities in Brazil with approximately 97% of the company’s installed generation capacity being hydroelectric power. The Zacks Consensus Estimate for the year 2013 is at US$1.41 per ADR while at US$1.46 per ADR for 2014. These represent a year-over-year decline of 42.5% for 2013 and growth of 3.8% for 2014.

CEMIG currently has a Zacks Rank #3 (Hold). Other stocks to watch out for in the industry are Companhia Paranaense de Energia (ELP - Analyst Report) and CPFL Energia S.A. (CPL - Snapshot Report), each with a Zacks Rank #1 (Strong Buy) while ALLETE, Inc. (ALE - Snapshot Report) with a Zacks Rank #2 (Buy).

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