NTERVIEW-Eletropaulo (SAO:ELP) draws huge interest
Reuters, Wednesday, March 18, 1998 at 22:45
By Fatima Cristina
SAO PAULO, March 18 (Reuters) - The sale of Sao Paulo
utility Eletropaulo is drawing strong investor interest, driven
by rising demand and growth prospects for the power sector in
Brazil's richest state, a top company official said.
Eletropaulo President Eduardo Bernini said a number of
local and foreign investors were lining up for the
privatization auction of the utility's distribution and
transmission assets on April 15.
"We have noticed that all big players have shown
interest," he told Reuters in a telephone interview earlier
this week.
Major energy firms such as U.S. Houston Industries (NYSE:HOU),
Enron Corp (NYSE:ENE), GPU Inc (NYSE:GPU), Spain's Endesa (MADRID:ELE),
Chile's Chilectra (SAN:CHE), and Argentina's Perez Companc
(BUE:PER) together with Britain's National Grid Group Plc
(ISEL:NGG) have already visited Eletropaulo's so-called "data
room" to view the company's records, he said.
Privatized power firm Light (SAO:LIG), controlled by a
consortium led by Houston, U.S. AES Corp (NYSE:AES) and France's
EDF, and local VBC group, which last year bought Sao Paulo
state's utility CPFL (SAO:PAL), also have analyzed Eletropaulo's
books, he added.
More companies are expected to visit the data room which
will be open until April 6.
Eletropaulo, which distributes electricity to Sao Paulo
city and its industrial suburbs, has been split into four
units: two distributors -- Metropolitana and Bandeirante -- a
transmission company, Empresa Paulista de Transmissao de
Energia (EPTE), and a small generator.
The Sao Paulo state government, Eletropaulo's majority
shareholder, will sell a 74.88 percent voting stake in each
distribution unit for a total base price of 3.04 billion reais.
Metropolitana, the choicest asset covering Sao Paulo city
and serving 4.2 million customers, will be sold for at least
2.026 billion reais. The minimum price for Bandeirante,
covering non-metropolitan Sao Paulo with two million
customers, was set at 1.014 billion reais.
The state also has set a minimum price of 148.85 million
reais for a 36.69 percent voting stake in the transmission
unit. The generator will remain 100 percent controlled by the
state.
The attractiveness of the new companies is simple, Bernini
said. The new owners of Eletropaulo's spin-offs will belong to
a market that promises to grow steadily over the next 10 years,
Bernini said.
He estimated consumption to grow an average 2.5-3.0 percent
a year in the area served by Metropolitana and an average
4.0-4.5 percent a year in the region covered by Bandeirante
over the next decade.
Both distributors will be sold at closed-envelope auctions
at 0900 local time/1200 GMT, while the shares in the
transmission firm will be offered at 1800 local time/2100 GMT.
Bernini said the state decided to sell its shares in EPTE
too late in the day to give winners of the distribution assets
time to consider buying the stake in the transmission firm.
"The transmission services are practically exclusively
dedicated to the distributors. That could be an interesting
investment for buyers of the distribution spin-offs," he said.
The Eletropaulo chief said the company's privatization
process is moving smoothly and no delays should be expected.
Last week, the state published the bid specifications for the
sale.
Bernini also dismissed fears that recent blackouts could
take the shine off Eletropaulo's sell-off.
Unlike privatized Light (SAO:LIG) and Cerj (SAO:CBE) in
neighboring Rio de Janeiro, which have been plagued by power
cuts due to a surge in demand, Eletropaulo's blackouts were
isolated and caused by strong rains and winds that hit the city
in early March, he said.
2485412,fatima.santos@reuters.com))
Copyright 1998, Reuters News Service |
