UPDATE 1-Goldman banker Bicudo to head Brazil's Eneva, source says

Wed Jan 22, 2014 1:44pm EST

By Guillermo Parra-Bernal

SAO PAULO Jan 22 (Reuters) - Brazilian energy producer Eneva SA named former Goldman Sachs Group Inc dealmaker Fabio Bicudo as chief executive officer, a source with direct knowledge of the situation said on Wednesday.

Bicudo left Goldman Sachs this week after a four-year stint, his second there, according to a memo obtained by Reuters. Last March, he became co-chief of Goldman's investment banking unit in Brazil alongside Antonio Pereira as part of a shakeup that followed a capital injection and a shift toward higher-margin products.

Eneva, formerly known as MPX Energia SA, is jointly controlled by E.ON SE, Germany's largest utility, and Brazilian investor Eike Batista. Goldman Sachs was the main adviser for E.ON on its investment in MPX, which the German company renamed Eneva after building a 37.9 percent stake through a series of stock purchases from Batista.

"My work at Goldman Sachs was extremely gratifying because it not only allowed me to work with large Brazilian companies but also key multinationals," the memo quoted Bicudo as saying. "One of those companies invited me to head its operations."

Eneva declined to comment. Efforts to reach Bicudo on his mobile phone for comment were unsuccessful.

The company will announce the move shortly, Bicudo said in the memo.

Bicudo has extensive experience brokering deals in Brazil's electricity sector. Among the deals he led at Goldman was Electricité de France SA's sale of a stake in Light SA . When Citigroup Inc hired him in 2006, he took those clients and the deal with him.

E.ON turned to Brazil for growth following the implementation of tougher environmental rules at home and the impact of Europe's economic crisis over the past five years. But its bet on MPX and subsequently Eneva has proven costly: Shares of the Rio de Janeiro-based company are down about 74 percent since E.ON first bought a stake in January 2012.

CHALLENGE

Shares of Eneva erased early gains and were unchanged at 3.28 reais late Wednesday afternoon. The stock is up 11 percent this year.

Bicudo's new job might be finding additional sources of capital as well as restoring investor confidence. Batista faces a dearth of new money after his Grupo EBX conglomerate of mining and energy companies almost collapsed last year, and E.ON reportedly is refusing to inject more money into Eneva.

For its part, Eneva must contend with sluggish economic growth in Brazil and potential caps on energy rates as the government battles persistently high inflation. After a decade-long boom, flagging investment and eroding business and consumer confidence caused the nation's economy to shrink in the third quarter, its first contraction since early 2009.

Analysts expect Eneva to post a net loss of 666 million reais ($282 million) for 2013, according to Thomson Reuters StarMine. The company operates 2,400 megawatts of installed capacity, with another 524 MW under construction.

The source, who spoke on condition of anonymity, declined to say when Bicudo starts at Eneva. Currently, Eduardo Karrer is both CEO and head of investor relations at the company.

Bicudo's departure from Goldman comes after a flurry of top executives left the Brazilian unit in the past year in the wake of waning financial advisory activity. They include investment banker Rodrigo Mello and wealth management executive Adriano Koelle, the source added.

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