Brazil's integrated electric utility,
Companhia Energetica de Minas Gerais
), also known as CEMIG and its two affiliated companies, Cemig
Geração e Transmissão S.A. (C
) and Transmissora Alianca de Energia Electrica S.A., or TAESA,
entered into a contract involving transfer of shareholding in some
As per the terms of the contract, TAESA will be paying roughly
R$1.73 billion in exchange for the minority holding of six
transmission companies held by Cemig and Cemig GT. Of the total
disbursement, approximately R$1.67 billion will be paid to Cemig
while the rest R$61.1 million to Cemig GT.
The shareholding restructuring will enable Cemig to consolidate
its transmission holding under one roof and allow optimal
utilization of the assets.
Cemig, among the largest integrated electric utilities in
Brazil, gives tough competition to its peers like
Companhia Paranaense de Energia
). We believe CEMIG is comfortably positioned to benefit from the
rising demand of electricity in Brazil. The company, with its
integrated nature of activity (generating and distributing energy)
and aggressive expansion plan is making its presence felt among the
industrial customers both in the south and southeast of Brazil.
In its recently announced first quarter 2012 results, Cemig
reported a 20% year-over-year increase in net earnings. Top line in
the quarter jumped 15%, driven primarily by a 2.6% growth in
The current Zacks Consensus earnings estimate for the fiscal
years 2012 and 2013 are $1.65 and $1.75 per share. These represent
a 13.05% year-over-year decline and growth of 6.05%,
The stock currently has a Zacks #3 Rank translating into a
short-term (1-3 months) Hold rating.
CEMIG SA -ADR (CIG): Free Stock Analysis Report
COPEL-ADR PR B (ELP): Free Stock Analysis
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