Is Brazil's Eneva mulling new offer for AES Tietê?

Bnamericas Published: Tuesday, April 28, 2020
Is Brazil's Eneva mulling new offer for AES Tietê?

Brazilian power company Eneva obtained short-term financing of 90mn reais (US$15.8mn) to strengthen its cash balance, an operation that raises speculation that the firm may launch a new takeover bid for AES Tietê

The one-year funding comes from China Construction Bank and at interest of 2.5% above inflation. 

"The funds disbursed with the financing agreement will add to the 410mn reais previously raised through the issuance of debentures, as announced in a notice to the market on April 13, 2020," Eneva said.

"The total amount of 500mn reais will further strengthen Eneva's cash balance, enhancing liquidity during the ongoing pandemic and guaranteeing greater flexibility to explore potential investment opportunities that arise." 

Earlier this month, AES Tietê, a unit of US-based AES Corp, rejected Eneva’s 6.6bn-real shares and cash bid for the company.

However, its CFO Clarissa Della Nina was quoted by Reuters as saying AES Tietê may revive talks on a merger with Eneva if the bid is raised.

Eneva’s motivation for the merger was the complementary nature of the two companies’ business portfolios and their diversified geographical footprint with assets in all Brazilian regions. 

The combined company would have become Brazil’s fourth largest power generator with projected thermo, wind, hydro and solar capacity of 6.4GW by 2024.

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