UPDATE 1-Brazil's J&F plans to exit electricity investments -sources
(Adds details on projects, comments throughout)
By Luciano Costa
SAO PAULO, July 28 (Reuters) - J&F SA, the Brazilian investment holding company controlling the world's No. 1 meatpacker, plans to exit investments in the domestic electricity industry as the economy slumps and state financing to the sector is severely reduced, two sources with direct knowledge of the matter said on Tuesday.
J&F, which is controlled by Brazil's Batista family, has invested a total 3 billion reais ($874 million) in projects including windpower plants and transmission lines since their first foray into the industry almost three years ago, said the first source, who requested anonymity because the decisions are private.
A series of setbacks since J&F teamed up with government-controlled Furnas Centrais Eletricas to build 13 windpower plants weighed on the group's interest in the sector, the same source added. Ongoing projects in the windpower and power transmission areas will be completed and then put on the block, both sources said.
"The scenario nowadays is very uncertain," the first source said.
The decision underscores the challenging outlook for a sector that was hampered by erratic policy decisions over the past three years. Investors in power generation, transmission and distribution as well as alternative segments have suffered with losses stemming from years of stagnation, rising borrowing costs, high state intervention and two years of drought.
J&F, which concentrates the Batistas' investments in pulp, agribusiness, cosmetics, home cleaning products and finance, declined to comment. J&F also controls JBS SA, the world's largest meatpacker.
According to the first source, recent government steps to reduce available financing from state development bank BNDES triggered doubts at J&F over its participation in the sector. Continuación...