Brazilian state of Minas Gerais would sell its stake in power company Cemig

Brazil’s Minas Gerais state is considering reducing its controlling stake in power company Cemig by selling shares in the company, a move that would effectively turn it into a corporation, daily Valor Económico quoted governor Romeu Zema as saying.

The strategy would be similar to the one used by Brazil’s federal government to privatize Eletrobrás earlier this year and the offer launched by Paraná state to dilute its stake in power company Copel.

Zema, a member of the market-friendly “New Party” that failed to privatize Cemig in his first term after facing obstacles in the Minas Gerais state legislature, was re-elected with a landslide victory in October.

“Cemig could be the case of a ‘corporation process,'” Zema told Valor in an interview about the company, formally known as Companhia Energetica de Minas Gerais.

“The state would not sell (its entire stake), the company would receive new investment, and I would be satisfied just with the state not having the last word, protecting the company from mismanagement and at the same time receiving dividends.”

Zema added that his goal is to push a broader privatization agenda in 2023 that would include sanitation company Copasa and state development company Codemig, according to the paper.

Cemig and the Minas Gerais state press office did not immediately respond to requests for comment.