Companhia Energetica de Minas Gerais (CIG), known as Cemig, acquired a 0.53% stake in Light S.A. for approximately R$30.5 million, or R$28.17 per share from Andrade Gutierrez Concessões S.A.
The transaction involved the exchange of roughly 1.1 million common shares of Light S.A and ends the Share Purchase Agreement signed on December 30, 2009, between Cemig and Andrade Gutierrez Concessões S.A.
Earlier on March 25, 2010, Cemig acquired approximately 25.5 million common shares of Light S.A. from Andrade Gutierrez Concessões S.A for roughly R$718.5 million. These shares represented around 12.50% of the total and voting capital of Light.
Taking into account the original interest of 13.03% in Light S.A. and the 12.50% (March) and 0.53% (November) interest acquired from Andrade Gutierrez Concessões S.A., Cemig holds over 26.06% interest in Light S.A.
Light S.A. through its subsidiaries generates, transmits, distributes and commercializes electric energy in the Brazilian state of Rio de Janeiro. The main subsidiaries of Light S.A. are Light Servicos de Eletricidade SA, Light Energia SA and Light Esco Prestacao de Servicos SA, among others.
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 company reported quite disappointing financial results for the third quarter 2010 with earnings per share down to R$0.89 (US$0.51 per ADR) versus R$0.92 (US$0.49 per ADR) in the third quarter of 2009. Net revenue was R$3,183.2 million (US$1,808.6 million) up 6.5% year over year due primarily to higher volumes sold.
The company is in stiff competition with its peers like Companhia Paranaense de Energia (ELP), EDP-Energias de Portugal, S.A. and privately-held Eletropaulo Metropolitana Eletricidade de São Paulo SA.
We currently maintain a Neutral rating on the stock.
CEMIG SA -ADR (CIG): Free Stock Analysis Report
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