Cemig Confident on Taesa Share Sale: CFO

Brazil’s Transmissora Alianca de Energia Eletrica (Taesa) will brave market conditions and proceed with its planned equity sale of up to BRL2.0bn ($990m), despite a questionable new issuance market. “The deal is going forward and we believe in the attractiveness and interest of this company. There is no reason for postponing under current market conditions,” Luiz Rolla, CFO at Taesa parent Cemig, tells LatinFinance. Rolla says despite volatility in the market, the utilities sector is considered a high-growth, defensive sector with stable and predictable cash flows. “This is our case, with investors turning to the power industry during the crisis and flocking to utility stocks, as the dividend policy is stable and dividend yield has been high,” the official adds. Taesa officially registered the deal this week, and now awaits the 30-day approval period before launch. Taesa will offer its units in the sale, classified as a “Re-IPO,” given the illiquidity of its outstanding shares, consisting of one common and two preferred shares. It plans to set a price range at launch, according to its regulatory filing, as if it were an IPO. Proceeds are marked for acquisitions and projects. Bank of America Merrill Lynch, BTG Pactual, Banco do Brasil, Goldman Sachs and Santander are managing the sale. Ahead of the approval, Taesa plans to raise BRL1bn in 1-year domestic market bridge debt, with proceeds to be used to retire debt used in the purchase of a stake in Abengoa Brasil. Banco do Brasil, BTG Pactual and HSBC are managing. The European crisis has raised opportunities for consolidation, and Cemig officials say Taesa is prepared for more opportunities to acquire Brazilian assets owned by European companies, but decline to provide further details on M&A plans. “Our strategy of growth through acquisitions is a very strong tool used over the last 10 years and the results are there. We are always looking at how to maintain a high rate of growth through acquisitions,” says Cemig boa