São Paulo State Government prepares Cesps privatization in 2008
Gazeta Mercantil 12/28/2007
Last Friday, the government of the State of São Paulo took a decision that was already expected in the energy sector: resuming the debate about the privatization of Companhia Energética do Estado de São Paulo (Cesp) - an Electric Utility. In the material fact submitted to the Brazilian Securities and Exchange Commission (CVM), the Administrative Board of the State Privatization Program (PED) authorized Governor José Serra to continue with the studies on the sale of the company which, according to the survey made by the banks Fator and Citibank, is estimated to value R$ 14 billion (US$ 7.9 billion). This decision was under discussion since the 23rd of October when the Revenue Department of the State announced the contracting of the consortium which is led by Citibank in order to start the rendering of consulting services for the evaluation, modeling, and implementation of the sale of interest, of the stocks held by the government of the State in Cesp's capital stock. The São Paulo company, one of the largest energy producers of the Country, is responsible for 60% of the energy produced in the State and by 10% of the energy generated in the Country. Altogether there are six hydroelectric plants with total installed capacity of 7,456 megawatts (MW) and guaranteed energy of 3,916 MW/average. The largest plant, Ilha Solteira, with 3,444 MW of installed capacity, is located on the Paraná River. In last Friday's announcement, the Administrative Board of the State Privatization Program decided to call a public hearing in which there will be the discussion of the modeling of the sale that may be made in one single block through an auction in the stock market.