(Adds shares performance, overallotment)
RIO DE JANEIRO, July 2 (Reuters) - Brazilian power company Light SA has approved a primary and secondary share offering valued at over 2 billion reais ($521 million), which sent the company’s shares down nearly 5% on Tuesday.
According to a securities filing late on Monday, which confirmed a Reuters report earlier in the day, Light has approved a primary offering of 100 million new shares and 11.1 million shares owned by power company Cemig. Given Light’s Monday closing price on the Sao Paulo stock exchange of 18.85 reais per share, the total value of the offering comes to 2.09 billion reais.
Light primarily operates in the electricity distribution sector in the Rio de Janeiro metropolitan area. Cia Energetica de Minas Gerais SA, as Cemig is formally known, currently has a 49.99% stake in the firm.
If shares in overallotments are sold, Cemig will also offer an additional 22.2 million shares. As a consequence, its stake could be reduced to nearly 34%.
Reuters reported on Monday afternoon that Light was preparing the offering to reduce debt. The company ended March with a net debt of 8.2 billion reais, which is equivalent to 3.7 times its earnings before interest, taxes, depreciation and amortization (EBITDA).
The offer will be led by Banco Itau BBA SA, with Citibank, Banco Santander Brasil SA, Banco Bradesco SA , BB Investimentos, XP, and Banco BTG Pactual SA also coordinating the offering.
The new shares are scheduled to begin trading on July 15.
($1 = 3.84 reais)
Reporting by Gram Slattery Editing by Chizu Nomiyama