Government of MG considers privatizing Cemig in a ‘corporation’ model, says newspaper

The government of Minas Gerais has plans to relinquish control of Cemig through a share sale operation that would make the electricity company a “corporation”, with dispersed control, according to a report in the Valor Econômico newspaper.

According to the news, the proposal of governor Romeu Zema (Novo) would be to keep the State as a relevant shareholder of Cemig. It would not yet be defined whether there would be the creation of a “golden share”, a special class action that gives the State veto power in certain matters.

“The State would not sell, the company would receive new investments and just because the State does not have the final say I am satisfied, because the company is shielded against bad management. The State continues to receive dividends and will appreciate in value”, said Zema to the Value.

In 2023, he intends to launch a privatization agenda, which includes two other state-owned companies, Copasa and Codemig, according to the publication.

When contacted, the government of Minas Gerais did not immediately respond to requests for comment.

Zema has had plans to privatize Cemig since he was elected governor in 2018, but the project did not gain traction during his first term, mainly due to strong resistance from local lawmakers.

Re-elected in October this year, he intends to resume the plan along the lines of what was done at Eletrobras and which is also being replicated by Paraná at Copel.

Cemig is one of the few electric companies still state-owned. In recent years, the company has carried out a repositioning of its strategy, seeking to reduce its participation in businesses considered non-strategic and allocating more resources to investments in Minas Gerais.