Brazil’s Taesa sees tighter credit market

Brazilian electricity transmission company Taesa is seeing a deteriorating credit market due to the coronavirus outbreak's impact on the global economy, but the scenario is not expected to affect the firm for now as it has already anticipated financing for its nine transmission projects under construction.   

During a conference call with analysts on Friday, Taesa’s CFO Marcos Aucélio said the company raised 4.7bn reais (US$992mn) in 2019, of which 3.6bn came from debenture issues.   

“We have sufficient resources for all the investments the firm needs to do until December. We should need to roll over debt around October, but since we have a triple-A rating from three agencies we don't see many problems for this operation and we'll also see the best time to do it,” said Aucélio. “In spite of the crisis, the firm has cash and credit to get through this time.”

Taesa expects to invest 1-1.1bn reais in 2020. The firm raised this year’s capex forecast after having invested 314mn reais in 2019, less than the minimum 410mn reais anticipated, due to postponements in payments for the construction of the Janaúba and Santana transmission lines, in addition to delays in the Mariana line, caused by heavy rains in Minas Gerais state at the end of last year.   

“The capex delay doesn't interfere with the projects' timeframes and, although the delivery of the Mariana line was postponed to April, the concession schedule will be respected,” Aucélio added.   

Taesa confirmed it will participate in the transmission tenders scheduled for this June and December. According to CEO Raul Lycurgo, the first auction is expected to be smaller than the second one, but the company will be present in both, having said it is open to both brownfield and greenfield acquisitions.  

“With our current projects beginning operations and with the capex efficiency we gained we can submit more competitive bids,” Lycurgo said.

For 2019 Taesa posted a 1.0bn-real net profit, down 6.4% on the previous year. Gross operating revenues totaled 1.98bn reais, up 9.6%.