The Toronto-based manager is considering increasing its offer by 25%
Canadian-based Brookfield Asset Management is mulling over boosting its takeover offer for Renova Energia, a renewable power plant operator.
According to Reuter's sources, the asset management firm is currently in talks around increasing its offer by 25%, in the efforts to encourage the firm's largest stakeholders to give up their controlling shares.
The revised bid would see Brookfield offering Cia Energética de Minas Gerais (Cemig) and its subsidiary Light BRL 11.25 per share. The bid would likely push the Canadian firm to shell out BRL 1 billion, or roughly $400 million, to capture control in the power firm. Cemig and Light possess a combined 64.4% voting stake in the firm. It should be noted that Cemig is Brazil's third-biggest power utility.
This gives Brookfield two choices: It can either inject another BRL 800 million into Renova or take the company private. Should Cemig exits Renova, it will be able to refinance its BRL 4 billion of debt maturing this year.
The Canadian firm originally offered BRL 9 per share in Renova. The renewable power operator has suffered from cash crunch over the past years. Its financial standing worsened when its collaboration with another struggling renewable energy company, SunEdison, collapsed. The latter filed for bankruptcy protection in the US weeks before the partnership's demise.
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According to Reuter's sources, the asset management firm is currently in talks around increasing its offer by 25%, in the efforts to encourage the firm's largest stakeholders to give up their controlling shares.
The revised bid would see Brookfield offering Cia Energética de Minas Gerais (Cemig) and its subsidiary Light BRL 11.25 per share. The bid would likely push the Canadian firm to shell out BRL 1 billion, or roughly $400 million, to capture control in the power firm. Cemig and Light possess a combined 64.4% voting stake in the firm. It should be noted that Cemig is Brazil's third-biggest power utility.
This gives Brookfield two choices: It can either inject another BRL 800 million into Renova or take the company private. Should Cemig exits Renova, it will be able to refinance its BRL 4 billion of debt maturing this year.
The Canadian firm originally offered BRL 9 per share in Renova. The renewable power operator has suffered from cash crunch over the past years. Its financial standing worsened when its collaboration with another struggling renewable energy company, SunEdison, collapsed. The latter filed for bankruptcy protection in the US weeks before the partnership's demise.
For more of Wealth Professional's latest industry news, click here.
Related stories:
Where to invest in the back half of 2017
Are Canadian investors ready to give up oil?
