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Brazil's Cemig is interested in some assets of troubled Rede-CEO
September 27, 2012 / 7:01 PM / in 5 years

Brazil's Cemig is interested in some assets of troubled Rede-CEO

* Cemig has initial interest in some Rede companies

* Rede was seized by regulators on recent debt woes

* Cemig might take part in new oil and gas auctions

By Leonardo Goy

BRASILIA, Sept 27 (Reuters) - Cemig Chief Executive Djalma Bastos de Morais said on Thursday that Brazil’s No. 2 electricity producer is “interested” in some assets of smaller rival Grupo Rede Energia, which was recently seized by regulators after repeated service glitches and its failure to reduce debt.

Morais, speaking to reporters in Brasilia, declined to say which units or assets of Rede Cemig would be willing to bid for. Cemig is majority-owned by the Brazilian state of Minas Gerais.

Energy regulator Aneel voted on Aug. 31 to seize eight units of debt-laden Rede Energia, marking the strongest-ever state intervention in the sector to avert a halt in power service in six states. This month, President Dilma Rousseff agreed to extend dozens of licenses that are due to expire through 2015 on the condition that utilities cut rates for final consumers.

Morais also said that Cemig might bid for a new round of auctions aimed at selling exploration rights in oil and gas next year. Cemig already has a license to explore for natural gas in Brazil’s San Francisco Basin, which are located in the state of Minas Gerais.

Common shares of Cemig fell 1.3 percent on Thursday to 25.05 reais.

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