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CPPIB, Votorantim Energia take over CESP for $458-mn

Share Source By

Dion Global

22 Oct 2018

Votorantim Energia and Canada Pension Plan Investment Board (CPPIB) announced today that a consortium formed by their joint venture has acquired the controlling stake in Brazilian hydro generation company Companhia Energ‚tica de Sao Paulo (CESP), acquiring 80.2% of its common shares and 13.7% of its class B preferred shares. This investment is the result of an auction held today by the State of Sao Paulo at the Brazilian Stock Exchange.

The consortium offered R$14.60 per common and class B preferred share for a 35.6% stake in the company’s total share capital, representing a R$1.7 billion investment by the joint venture partners.

Following the completion of the transaction, and as described in the auction bidding documents, CESP will be granted a new concession for the Porto Primavera Hydroelectric Power Plant for 30 years in exchange for a payment of R$1.4 billion. Following the change of control, the consortium will launch a Mandatory Tender Offer for the remaining common and class B preferred shares of CESP, compliant with the terms outlined in the auction bidding documents, the company’s bylaws and the applicable regulation of the Brazilian Securities Exchange Commission, Comissao de Valores Mobiliarios.

This transaction aligns with the growth objectives of the joint venture between Votorantim Energia and CPPIB in renewable energy in Brazil, adding to its current portfolio of 564MW of installed capacity. The joint venture was first announced in December 2017 with a target to invest in Brazil’s power generation sector.

The closing of the transaction, and subsequent transfer of control of CESP, is subject to customary regulatory approvals, including Agˆncia Nacional de Energia El‚trica (ANEEL) and Conselho Administrativo de Defesa Econ“mica (CADE).