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SAO PAULO, Aug 9 (Reuters) - Cia Energética de Minas Gerais has mandated two banks to oversee sale of the controlling stake it has in electricity distributor Light SA, as Brazil's No. 3 power utility company races to cut debt, a source with direct knowledge of the transaction said on Tuesday.
The source, who asked for anonymity because the plan remains private, said Cemig has given the investment-banking units of Banco Santander Brasil SA and Banco Votorantim SA mandates to conduct the sale of the 39 percent that it directly or indirectly owns in Light.
The process will be launched as early as this month, the source added. Belo Horizonte, Brazil-based Cemig, as well as lenders Santander Brasil and Votorantim declined to comment.
If sold at current market prices, Cemig could raise at least 1.2 billion reais ($382 million) with the Light stake sale, without including a premium, according to Thomson Reuters calculations. Cemig owns a 26 percent direct stake in Light and has another 13 percent stake in different investment vehicles with other shareholders.
Cemig, hobbled by declining consumption and years of rampant debt taking, is selling assets with disappointing returns or too much need for capital spending in an effort to cut liabilities that topped 13 billion reais in March. Reuters recently reported that Cemig is hiring banks to manage the sales of small hydropower dams and a gas distribution unit.
Cemig's main shareholder, the state of Minas Gerais, has no money at this point to inject fresh cash into the utility. Regional governments in Brazil, including mineral-rich Minas Gerais, are struggling with record budget deficits - which led Brazil's federal government last month to refinance 81 billion reais of state obligations.
Preferred shares, Cemig's most widely traded class of stock, shed 1.6 percent to 9.38 reais on Tuesday. Light gained 0.6 percent to 15.18 reais, extending year-to-date gains to 54 percent.
According to the source, Cemig has had previous contacts with potential investors in Light. The source declined to name interested parties, what premium Cemig wants to be paid in the transaction and other terms of a deal.
Cemig's decision to hire Santander Brasil and Votorantim was reported by Brazilian magazine Exame.
$1 = 3.1409 Brazilian reais Reporting by Tatiana Bautzer; Editing by Guillermo Parra-Bernal and David Gregorio