Brazilian electricity company Companhia Energetica de Minas Gerais CIG, also known as CEMIG, recently announced that it has signed an agreement to sell its interest in Transchile Charrúa Transmisión S.A. to Ferrovial Transco Chile SpA, a controlled-company of Ferrovial S.A.
Per the share repurchase agreement, CEMIG will be disposing its entire interest, equivalent to roughly 49% of the share capital, in Transchile Charrúa. The transaction has been valued at approximately $56.6 million.
CEMIG anticipates the disposition to be complete after fulfilment of the agreed terms.
CEMIG is one of the largest integrated electric utilities in Brazil, with approximately 97% of its installed generation capacity being hydroelectric power. In addition to its integrated electricity business, the company is engaged in natural gas distribution and telecommunications. Over the long run, the company will benefit from rise in electricity demand in Brazil. In order to leverage benefits from the rising demand, the company seeks to increase its production and distribution capacity.
Over the last 60 days, the Zacks Consensus Estimate for CEMIG increased 8.3% to 26 cents per share for 2016 and by 19.2% to 31 cents per share for 2017.
CEMIG SA -ADR Price and Consensus
CEMIG SA -ADR Price and Consensus | CEMIG SA -ADR Quote
Zacks Rank & Other Stocks to Consider
With a $3.4 billion market capitalization, CEMIG currently carries a Zacks Rank #2 (Buy). Other stocks worth considering in the utility-electric power industry include Spark Energy, Inc. SPKE, American Electric Power Co., Inc. AEP and DTE Energy Company DTE. While Spark Energy sports a Zacks Rank #1 (Strong Buy), both American Electric Power and DTE Energy Company carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
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