October 11, 2018 / 11:49 AM / a year ago

China's SPIC to make binding offer for Santo Antonio dam stake -paper

SAO PAULO, Oct 11 (Reuters) - China’s State Power Investment Corporation (SPIC) is expected to make a binding offer for a stake in Brazil’s Santo Antônio hydropower dam, newspaper Valor Econômico reported on Thursday.

The company will make a binding offer of around 2 billion reais ($533 million) in coming days to acquire stakes from state-run Companhia Energética de Minas Gerais SA (Cemig) and engineering groups Odebrecht and Andrade Gutierrez, Valor said, citing an unnamed source.

The three companies own a combined 41 percent of the project, according to information on Santo Antônio’s website. SPIC and the three potential sellers did not have an immediate comment.

The bid would value the entire enterprise at 3.5 billion reais, considered low due to the dam’s heavy debt load, the Valor report said.

Reuters reported in July that Cemig and Odebrecht were at odds over a Chinese offer to acquire a controlling stake in the Santo Antonio hydropower project.

Odebrecht, which is struggling to cut debt and recover from a corruption scandal, would be in favor of the sale while Cemig believed then that the offer did not reflect a fair value.

State-run Furnas, a unit of state-run power holding company Centrais Eletricas Brasileiras SA (Eletrobras) that owns 39 percent in the dam in the remote state of Rondônia, would not sell its stake, Valor said. Furnas did not have an immediate comment.

Santo Antônio did not immediately respond to a request for comment.

On Tuesday, Eletrobras shares fell after Brazil’s leading presidential candidate, far-right politician Jair Bolsonaro, said he is not willing to sell state power generation assets.

In an interview with a local TV station, Bolsonaro said that selling more generation assets would leave Brazil “in the hands of China.” ($1 = 3.76 reais) (Writing by Ana Mano Editing by Frances Kerry)

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