Nov 24 (Reuters) - The majority shareholder of Cia Energetica de Minas Gerais SA, Brazil’s largest electricity utility by market capitalization, may cut dividends next year and instead direct the money into investments, the Valor Econômico newspaper reported on Monday.
It said Fernando Pimentel, the newly elected governor of the state of Minas Gerais, which controls the company, sees payments to shareholders as too high. Sources close to Pimentel also told Valor that the company’s union endorses the move.
Pimentel takes office on Jan. 1. Cemig, as the utility is known, has a payout ratio of more than 90 percent. This year’s dividend will only be known early next year, but Cemig has already announced it will return about 1.7 billion reais ($680 million) in the form of one-time dividends.
Officials from Cemig and Pimentel were not immediately available to comment on the report.
$1 = 2.5152 Brazilian reais Reporting by Silvio Cascione; editing by Guillermo Parra-Bernal and Jason Neely