* Cemig declines to say what covenants broken
* Company's board calls shareholder meeting for Dec. 12
* Board declares $430 million extraordinary dividend
By Jeb Blount
RIO DE JANEIRO, Nov 7 (Reuters) - Brazilian energy utility Cia Energetica de Minas Gerais has broken financial covenants outlined in its bylaws and has called a shareholder meeting to discuss the issue, the company said in a securities filing on Friday.
Cemig, as the electricity and natural gas generation and distribution company is known, did not say what covenants were broken or how it plans to deal with the situation.
Company officials were not immediately available for comment. Cemig's press office said more information would be made available when it was ready. Cemig, Brazil's biggest utility by market value, is controlled by the government of Brazil's Minas Gerais state.
Financial statements from Cemig, based in Brazil's Belo Horizonte, have highlighted the company's vulnerability to a weaker exchange rate.
The company's foreign debt in local-currency terms has ballooned in the last year as Brazil's real weakened about 10 percent against the dollar. Interest rates have risen in Brazil even as the economy has slowed, boosting the cost of local debt.
Warnings about exchange-rate risk in Cemig documents often proceed a list of key covenants regarding debt in the company bylaws.
Among other things, Cemig's bylaws require the company to maintain its debt at no more than two times earnings before interest, taxes, depreciation and amortization, or EBITDA. EBITDA measures a company's ability to generate profit from operations that can be used to pay debt, dividends or other financial expenses.
This can be raised to 2.5 times EBITDA under certain economic scenarios. Cemig's debt was 2.1 times EBITDA on Dec. 31, 2013. Brazil's real has weakened 10 percent against the dollar in the last 12 months and local interest rates have risen. This has caused the local currency value of dollar debt to rise.
Among the bylaws, other requirements are that Cemig keep average, consolidated net debt at 40 percent or less of the sum of its net debt plus shareholder equity and that capital investments and acquisitions never exceed 40 percent of EBITDA during any accounting period.
Cemig also said on Friday that it plans to pay an extraordinary dividend of 1.1 billion reais ($430 million) or 0.87 real per share. The payment will be made to shareholders of record on Friday.
$1 = 2.558 Brazilian reais Reporting by Jeb Blount; Editing by Lisa Shumaker