May 9, 2017 / 7:40 PM / a year ago

Brazil's Taesa to pick new CEO on May 17, sources say

SAO PAULO, May 9 (Reuters) - The controlling shareholders of Transmissora Aliança de Energia Elétrica SA are choosing between a senior company officer and a turnaround executive for the top job at Brazil’s No. 2 private-sector power transmission company, two people familiar with the matter said on Tuesday.

The board of Rio de Janeiro-based Taesa will meet on May 17 to pick a replacement for João Procópio, who stepped down as chief executive officer last month, said the people, who requested anonymity as the matter remains private.

Choosing Procópio’s successor has taken longer than expected because of a power struggle between some shareholders at Taesa’s parent firm Cemig, one of the people said. Cemig, which is formally known as Cia Energética de Minas Gerais SA is controlled by Minas Gerais state and construction group Andrade Gutiérrez SA.

Taesa’s Chief Legal Officer Luciano de Araújo Ferraz, who also heads the company’s regulatory affairs, remains the frontrunner for the CEO post as he enjoys the support of José Afonso Bicalho, Minas Gerais’s finance secretary and Cemig’s chairman, the first person added.

According to Taesa’s annual shareholder report published on April 17, Ferraz is being investigated for a Brazilian municipality’s alleged irregular hiring of his services as a lawyer.

In an email to Reuters, Ferraz declined to comment, noting that he is unaware of being considered for the CEO job at Taesa.

The other candidate is Carlos Figueiredo, who is leading a turnaround at Cemig-led renewable power firm Renova Energia SA , the people said. During his stint, Figueiredo has sold several assets and restructure operations to avert a collapse of Renova, the people added.

The media office of Rio de Janeiro-based Taesa said the decision to appoint a new CEO is not part of the May 17 meeting’s agenda. Cemig’s press office did not immediately comment, while Figueiredo could not be reached to discuss the issue.

Units, a blend of Taesa’s common and preferred shares, posted their biggest rise in two months on Tuesday, adding 3.4 percent to 23.78 reais. The stock is up 17.3 percent this year.

Taesa’s new CEO will be tasked with accelerating growth plans, which include taking part in upcoming auctions to build and operate transmission lines across Brazil.

Cemig has 31.5 percent of Taesa, with an investment vehicle controlled by Colombia’s ISA Interconexión Elétrica ESP SA holding about 13.9 percent. (Editing by Chizu Nomiyama)

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