(Recasts to add background, share performance from paragraph 2)
By Luciano Costa
SAO PAULO, June 8 (Reuters) - Brazil's São Paulo state aims to sell control of Cia Energética de São Paulo SA by around September, two people with knowledge of the plan said on Thursday, marking the latest move by regional governments in Latin America's No. 1 economy to raise cash and exit the utility industry.
According to the sources, who requested anonymity since the plan remains private, state officials and financial advisors are deciding on final terms for the sale - an auction to take place in the São Paulo Stock Exchange. Those details include the pricing range for the shares of Cesp, as the utility is known, one of them said.
State officials told Reuters last July that improved power-sector regulation under President Michel Temer has increased the allure of a sale. The long-dormant privatization of Cesp is key for São Paulo Governor Geraldo Alckmin to raise cash to cut an onerous debt burden and kickstart investment ahead of next year's elections.
Class B shares, Cesp's most widely traded class of stock, partially reversed earlier losses following the news. The stock fell 0.3 percent to 16.50 reais on Thursday after having shed as much as 2.5 percent in early morning trading.
Both the media offices of the state of São Paulo and Cesp declined to comment. The company's stock has climbed about 35 percent since July, when the officials confirmed plans to exit Cesp.
The local electricity industry has seen a flurry of takeovers in the past year as longtime shareholders like debt-laden regional governments try to stem the impact of Brazil's harshest recession ever. If São Paulo goes ahead with the sale, it would mark the revival of a plan that stalled 15 years ago in the face of a drought and a power-rationing crisis.
São Paulo state, Brazil's wealthiest, hired Banco Fator SA to carry out an appraisal of the fair value of Cesp's stock. The state owns 40.5 percent of Cesp's capital, including 95 percent of the utility's voting stock.
A full sale of the state's stake could fetch almost 2 billion reais ($611.5 million), based on current prices and without taking into account any premium, according to Thomson Reuters calculations.
Both the federal government and other states are in the process of disposing of power assets for similar reasons.
Centrais Elétricas Brasileiras SA and Cia Energética de Minas Gerais SA plan to divest generation and transmission assets, including their stakes in some of Brazil's largest hydroelectric dams - Santo Antônio and Belo Monte.
($1 = 3.2705 reais) (Writing by Ana Mano; Editing by Leslie Adler and Bill Trott)