UPDATE 1-Regulatory changes in Brazil may ease Cesp power utility sale

viernes 15 de julio de 2016 17:48 GYT

(Adds finance secretary's quotes, share prices)

By Luciano Costa

SAO PAULO, July 15 (Reuters) - Regulatory changes under Brazil's interim President Michel Temer could soon facilitate a sale by Sao Paulo's state government of its controlling interest in power utility Cesp SA, a state official said on Friday.

Sao Paulo Finance Secretary Renato Villela, told Reuters in a phone interview that no final decisions about a possible privatization had been made yet.

But while a previous plan to privatize Cesp stalled in 2011, due to investor concerns about the expiration of concessions involving its largest hydroelectric dams, Villela said that may no longer be the case.

"The sale did not progress due to regulatory uncertainty in the electricity sector. But this is changing, and with stable rules we may be removing the biggest hurdles," Villela said.

Cesp, which controls power plants in Sao Paulo state, has a 3.8 billion reais ($1.2 billion) market capitalization.

Preferred shares in Cesp had their biggest jump in almost eight years on Friday on the news the state was considering a sale of the company. Shares rose 19 percent, to 15.09 reais. Villela had spoken about a possible sale during a Friday meeting with investors arranged by JPMorgan Chase & Co. ($1 = 3.2811 Brazilian reais) (Reporting by Luciano Costa; Writing by Tatiana Bautzer; Editing by Chizu Nomiyama and Tom Brown)