German utility giant E.ON SE (EONGY.PK) will increase its stake in Brazilian energy company MPX Energia SA to 36.1 percent. E.ON will buy 24.5 percent stake of MPX Energia SA from Brazilian billionaire Eike Batista, with the investment to be up to 1.9 billion Brazilian real or (0.8 billion euros).
Initially, E.ON will acquire additional 24.5 percent stake in MPX for a minimum price of 10 real, which may rise to 11 real depending on certain conditions. In April last year, E.ON had bought 11.7 percent stake MPX from Eike Batista.
MPX will also offer about 1.2 billion real (0.5 billion euros) in shares to other investors to raise capital, the company said in a statement. E.ON has committed to invest 0.4 billion real (0.1 billion euros) in the capital increase. The company has retained investment bank BTG Pactual bookrunner of the public offering.
Finally, the existing MPX-E.ON Joint Venture company will be reintegrated into MPX at book value, increasing E.ON's stake in the company to around 36.1 percent.
E.ON in a statement said, "In addition, EBX and E.ON will enter into an agreement under which they will exercise their voting rights in MPX on an equal basis enabling them together to manage and develop the company."
In the new set-up, E.ON will "also have an equal participation in the day to day management of MPX and will be entitled to increase its representation on MPX's Board of Directors."
E.ON CEO Johannes Teyssen said, "Today's announcement is a confirmation of E.ON's strategic belief in the growth opportunities the Brazilian market offers with its positive outlook on long term power demand and economic growth prospects."
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