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BRASILIA/SAO PAULO, Nov 27 (Reuters) - Renova Energia SA’s board has approved Brookfield Asset Management Inc’s proposal to acquire a controlling stake in the Brazilian renewable energy company for 1.4 billion reais ($433 million), a securities filing showed on Monday.
Brookfield will buy new units, which consist of preferred and common shares, for 6 reais each, according to the filing by Renova stakeholder Light SA. It may pay an extra 1 real per unit, Renova’s most-traded stock, depending on the sale of wind farm Alto Sertao II.
Units of Renova, which is controlled by Companhia Energetica de Minas Gerais, rose 3.3 percent to 6.95 reais in opening trading on Monday, extending gains this year to 16 percent.
Reuters was first to report the negotiations between Brookfield and Renova in March. The deal, which began with a proposal to acquire a minority stake, evolved into an offer to control the renewable energy company in July.
Shortfalls found in due diligence proceedings reduced the price Brookfield was willing to pay for the company, a person with knowledge of the matter said.
Founded in 2001, Renova has struggled with a severe cash crunch since a deal with SunEdison Inc collapsed weeks before that company filed for bankruptcy protection in the United States last year.
The long-awaited Renova sale is part of an asset divestment program that Companhia Energetica de Minas Gerais, or Cemig, began to pay off debt.
$1 = 3.23 reais Reporting by Jake Spring and Tatiana Bautzer; Editing by Jason Neely and Lisa Von Ahn