Engie Brasil has disclosed the terms of a deal to purchase a 40% stake in the Jirau hydroelectric complex from Engie Brasil Participacoes, the unit controlled by France's Engie. The company filed the information with securities regulators on Tuesday.
The proposed acquisition will be financed through a capital increase of about 5.74 billion reais, equivalent to roughly $1.13 billion, using a share offering that is tied to the asset contribution. The offer includes an option for an additional allotment that could lift proceeds to as much as 8.36 billion reais.
As a related-party transaction, the agreement assigns a value of approximately 5.37 billion reais to the 40% stake. That valuation is about a 5% discount to the midpoint of an independent appraisal provided for the asset.
Company directors have given the transaction their approval. The definitive completion of the purchase depends on a vote by minority shareholders at an extraordinary general meeting, which is scheduled for July 2.
Located on the Madeira River in Brazil's Amazon region, the Jirau plant has an installed capacity of 3,750 megawatts. Engie Brasil said the asset is expected to generate more than 20 years of predictable cash flows supported by long-term contracted revenue.
The company also noted that it has been considering acquiring the controlling shareholder's stake in Jirau for several years. The current filing formalizes the terms of the transaction, the financing mechanism, and the valuation used for the related-party transfer.
The capital increase via a share offering linked to the asset contribution is the vehicle for payment, with the stated base proceeds of about 5.74 billion reais and the potential to reach 8.36 billion reais should the additional allotment be fully exercised. The transaction valuation of roughly 5.37 billion reais reflects the price assigned to the 40% interest and the cited comparison to the independent appraisal midpoint.
Provided minority shareholders approve the deal at the July 2 meeting, the company will proceed according to the terms filed with regulators. The filing and the board resolution outline the related-party nature of the transaction, the financing plan, and the timeline for shareholder consideration.
Beyond the financing and valuation mechanics, Engie Brasil highlighted the long-term revenue profile of the Jirau plant as a key aspect of the rationale for the acquisition, pointing to contracted revenue streams that underpin multi-decade cash flow visibility.
With the board's approval in hand and a shareholders' vote scheduled, the immediate next step for the company and investors will be the outcome of the extraordinary meeting on July 2.