Companies must be privatized to help pay off the State’s debt to the Union; there is no forecast for resumption of the debate
The Government of Minas Gerais suspended discussions regarding projects related to privatization plans for Cemig (Companhia Energética Minas Gerais) and Copasa (Minas Gerais Sanitation Company).
State deputies hope to resolve the problem of Minas Gerais debt through an alternative proposal for the federalization of these assets, including the immediate amortization of the main debt.
According to the newspaper State of Minas, among the discussions, would be the maintenance of privatization restrictions for these companies, which would maintain their administrative headquarters in Minas Gerais. Among the legal obstacles is the holding of a plebiscite and the 3/5 quorum of deputies. There is still no forecast for the resumption of the discussion.
Genial Investimentos considers the decision as the official end of the privatization process and the possible beginning of negotiations for the federalization of such assets. “We consider the event to be negative, especially for Cemig. It is still unknown how the federalization and evaluation process for reimbursement by the federal government would take place”, said Genial.
Issuance of debentures
The company will issue debentures worth R$2 billion. The debentures are simple, not convertible into shares, in up to two series, from the 10th issue, with a nominal unit value of R$1,000. The preliminary prospectus was released on Tuesday night (Feb 20), with presentations to potential investors scheduled to begin this Wednesday (Feb 21, 2024). The process of bookbuilding starts on March 12th.
Cemig's preferred shares closed the trading session on Tuesday (Feb 20) up 1.01%, at R$12.01. The average estimate compiled by InvestingPRO is a fair price of R$11.20, a potential downside of 6.8%.
With information from Investing Brazil.
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