SAO PAULO, Sept 1 (Reuters) - Brazilian power holding company Cia Energética de Minas Gerais SA could use proceeds from the sale of a minority stake in an electricity transmission subsidiary to help cash-strapped renewable energy unit Renova Energia SA, according to a person familiar with the plan.
According to the source, who asked for anonymity since the plan is under discussion, Cemig would inject about 170 million reais ($52 million) into several investment vehicles that Renova has set up to execute the construction of some windpower projects.
The move could be a lifeline for Renova, which is controlled by Cemig, as efforts to lure a partner and raise cash are taking longer than planned. On Wednesday, Cemig announced plans to sell a 13.8 percent stake in Transmissora Aliança de Energia Elétrica SA, more than twice the amount announced earlier last month.
Units of Taesa, a blend of the company's common and preferred shares, slumped on Thursday by the most in a month. Units were up 2.6 percent on Friday morning trading in Sao Paulo, at 22.10 reais. At current prices, the stake is worth around 880 million reais.
Press representatives for Cemig, which is controlled by the Brazilian state of Minas Gerais, declined to comment. Renova did not have an immediate comment.
Salvador, Brazil-based Renova is among many Brazilian power companies faced with a severe cash crunch as years of erratic policies and a harsh recession hurt the industry. Often seen as resilient during downturns, the renewable electricity industry is struggling with declining electricity consumption and the highest borrowing costs in a decade.
Reuters reported in June that Renova was in talks with potential investors to raise 1 billion reais in exchange for a stake. The company is taking advantage of a government policy allowing producers to renegotiate power sales to alleviate cash shortages while the search for a major investor continues, people familiar with the matter told Reuters in July.
According to the person, Rothschild & Co is advising Renova on how to improve its capital structure as the company negotiates the entry of a new partner. Financing conditions for Renova have worsened since a partnership with SunEdison Inc collapsed late last year.
$1 = 3.2471 Brazilian reais Additional reporting by Bruno Federowski in São Paulo; Editing by Guillermo Parra-Bernal and David Gregorio