Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Renova Energia CFO out after Light divestiture, failure to sell Brazil wind farms

Published 10/14/2019, 10:25 AM
Updated 10/14/2019, 10:31 AM
© Reuters.  Renova Energia CFO out after Light divestiture, failure to sell Brazil wind farms

By Tatiana Bautzer and Gabriela Mello

SAO PAULO (Reuters) - The CFO of Brazilian renewable energy firm Renova Energia SA (SA:RNEW11) resigned and a key shareholder gave up its stake after failed talks to sell heavily indebted wind farm projects.

Renova Chief Executive Officer Cristiano Corrêa de Barros will temporarily assume the responsibilities of outgoing Chief Financial Officer Claudio Ribeiro, the company said on Monday.

Separately on Monday, Renova shareholder Light SA (SA:LIGT3) said it had sold its 17.17% stake in the firm to an investment fund for a symbolic value of 1 real.

The exits of Light and Ribeiro follow years of unsuccessful talks to sell Renova's wind farm projects, which have racked up debt and raised concerns about their timely completion.

Negotiations to sell the projects to AES Tiete Energia SA (SA:TIET11), a subsidiary of AES Corp (N:AES), broke down last week after six months of discussions.

Renova has been trying to sell some of its wind projects for more than two years. Before AES, the company was in talks with Canada's Brookfield Asset Management Inc (TO:BAMa), which ended with no agreement in July 2018.

BTG Pactual analysts said "construction related risks" seemed to be the reason for AES Tiete to walk away from the deal, citing meetings with executives.

The result is negative for Light and state-controlled power holding company Companhia Energetica de Minas Gerais (SA:CMIG4) (Cemig), said the analysts led by BTG Pactual's Joao Pimentel in a note to clients written before Light sold its stake.

Cemig had a debt exposure of 768 million reais ($186 million) to Renova. Light had 253 million reais. Analysts say that if no other buyer shows up, the only solution would be for Cemig and Light to step up and finish the projects.

But Light has signaled the intention of not taking over with the sale of the stake to a fund.

The projects owe 960 million reais ($233 million) to state development bank BNDES, analysts said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.