Brazil utility Cemig says broke bylaw's financial covenants

viernes 7 de noviembre de 2014 17:52 GYT

* 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.   Continuación...