December 4, 2019 / 9:38 PM / 3 days ago

Brazilian state power firm Copel plans asset sales -CFO

SAO PAULO, Dec 4 (Reuters) - Brazilian state power company Companhia Paranaense de Energia plans to sell assets including one hydroelectric dam, a telecommunications subsidiary and a stake in a natural gas distribution company, Chief Financial Officer Adriano de Moura told Reuters on Wednesday.

Copel, as the company controlled by the state of Paraná is known, plans to adhere to a decree published a week ago by the federal government to stimulate privatization of power companies owned by regional governments.

President Jair Bolsonaro’s government allowed the states to extend the licenses to operate power generation for 30 years, even before the current licenses are set to expire. The alternative is available to regional governments that commit to privatizing their power companies. That makes it easier to attract private investors in acquiring the companies, guaranteeing revenues for a 30-year period.

Copel plans to adhere to this alternative and sell a majority stake in the hydroelectric dam Foz do Areia, whose license expires in 2023, Moura said. Copel would first renew the license to operate for additional 30 years and then sell a majority stake in the dam.

To comply with the new decree, the state of Paraná needs to commit to privatization of the hydroelectric dam by March next year to begin renewing the license.

Copel is also trying to sell its telecommunications unit and a 51% stake in Compagas, a natural gas distribution company. Moura said he expects to auction Copel Telecom in the first half of next year. Analysts at Banco BTG Pactual estimated the telecom unit is worth 1.8 billion reais ($430 million).

Copel expects to sell its stake in natural gas distribution company Compagas only in 2021, due to discussions with its partners about the expiration date for its license to operate. ($1 = 4.1964 reais) (Reporting by Luciano Costa in Sao Paulo; Editing by David Gregorio)

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