September 8, 2017 / 5:44 PM / 9 months ago

EXCLUSIVE-Brazil's Classico in talks to buy AGC's Cemig stake, source says

SAO PAULO, Sept 8 (Reuters) - Brazilian investment bank Banco Classico SA is in advanced talks to buy the 20.1 percent voting stake that AGC Energia SA has in Cia Energética de Minas Gerais SA, a person with direct knowledge of the situation said on Friday.

According to the person, AGC Energia could raise around 1.4 billion reais ($453 million) with the sale of the stake in Cemig, Brazil’s No. 3 power utility. AGC Energia, a unit of infrastructure conglomerate Andrade Gutiérrez SA, surprisingly decided to exit Cemig’s shareholder accord on Thursday without detailing the reasons.

Two people told Reuters that both partners disagreed over plans to reduce Cemig’s debt and dispose of money-losing operations and low-return, noncore assets. Both said that AGC Energia’s exit could facilitate efforts by Minas Gerais state to accelerate asset sales and reduce Cemig’s ballooning debt.

For almost 15 years, Andrade Gutierrez’s AGC shared management control of Cemig with the Brazilian state of Minas Gerais, which has a 51 percent voting stake in the company. Banco Classico currently owns about 8 percent of Cemig’s capital - which would include preferred and common, or voting, shares.

Efforts to obtain comment from Classico’s representatives in Rio de Janeiro were not immediately successful. Cemig, the state’s government and AGC could not immediately be reached for comment. ($1 = 3.0891 reais) (Reporting by Guillermo Parra-Bernal; Additional reporting by Luciano Costa in São Paulo; Editing by Matthew Lewis)

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