SAO PAULO--Brazil mining company Vale SA (VALE) is acquiring a
controlling stake in energy consortium Capim Branco Energia from
paper and pulp company Suzano Papel e Celulose SA (SUZB5.BR) for
223 million Brazilian reais ($113 million), the company said
Thursday in a statement.
"Vale exercised its right and completed the acquisition of a
12.47% stake in Capim Branco I and II hydroelectric power plants
from Suzano. As a consequence, Vale's stake will reach 60.89% of
Capim Branco I and II, which can generate 1,524 gigawatts hours of
energy per year by the end of the concession in 2036," Vale said in
a statement.
From Vale's perspective, the acquisition targets reduction of
the cost of energy of its operations, while for Suzano, the sale
represents its strategy to disinvest in noncore assets as part of
its efforts to reduce debts.
Before the transaction, Suzano controlled Capim Branco Energia
through a consortium with Minas Gerais-run power utility company
Cemig SA (CIG, CIGC, CMIG4.BR) with a 21.1% stake, Vale with a
48.4% stake, and industrial conglomerate Votorantim, which has a
12.6% stake.
Now, Capim Branco will be controlled by the consortium lead by
Vale, with participation from Cemig and Votorantim. Suzano said in
a separate statement that the sale of its stake totaled BRL320
million, as the company also agreed to sell a portion of its stake
to Cemig, although it did not unveil the current stake held by
Cemig in Capim Branco.
Write to Rogerio Jelmayer at rogerio.jelmayer@dowjones.com
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