By Alexandre Spatuzza in Sao Paulo
Tuesday, February 18 2014
In exchange DESA will hold a 12.63% stake in CPFL Renováveis through FIP Arrow, an equity fund through which the Weege family also controls DESA. Under the agreement, FIP Arrow will have the right to elect a member of the CPFL Renováveis' board.
CPFL Renováveis will also assume DESA's R$200m ($83.5m) debt, the companies said. Conclusion of the agreement will occur after auditing and authorisation from Brazil's electric regulator Aneel.
This is CPFL Renováveis' first acquisition this year. The privately held Brazilian company has been buying smaller renewables companies and assets for the past years as a declared growth strategy, staying out of government auctions.
Last year, CPFL Renováveis raised R$1bn through an IPO which it said would be used for mergers and acquisitions.
A person familiar with the negotiations told Recharge that the Weege family's decision to sell aims to avoid taking on more debt, or increase investments to develop its wind, solar and small hydroelectric generation assets and portfolio.
DESA has a portfolio of 300.8MW of projects planned, in construction and in operation. It also has a pipeline of 2.5GW in renewable energy projects.
CPFL Renováveis is controlled by CPFL Energia, one of Brazil's largest privately held conventional power generation, transmission and distribution companies.
Although CPFL Energia will reduce its 58.8% stake in CPFL Renováveis it will still have a controlling stake bigger than 50%, the company said in the statement.
NEWS FROM OTHER NHST SITES
To protect your subscription investment, we've instituted a security system to protect against the electronic redistribution of copyrighted Rechargenews content. Read more