Canada Pension Plan Investment Board (CPP Investments) is investing BRL$1.5bn (€238m) in an existing joint venture with Votorantim Energia as part of the partnership’s plan to consolidate several energy assets to create a new company and list on the B3 Stock Exchange.
VTRM – formed in December 2017 by the C$520bn (€354bn) Canadian investor and the energy arm of Brazilain conglomerate Votorantim – will acquire and consolidate both companies’ equity shares in a variety of renewable energy assets.
The assets include electricity producer Companhia Energética de São Paulo (CESP), VTRM’s existing wind and solar assets, Votorantim Energia’s shares in hydropower assets and Votorantim Comercializadora de Energia, in addition to several projects that VTRM is currently developing.
As part of the transaction, CPP Investments will invest BRL1.5bn to increase VTRM’s capital base, the companies said in a joint statement.
Also, the joint venture is proposing to merge CESP’s shares into VTRM and further consolidate assets as part of the plan to create the new combined company with BRL$ 5.8bn in net revenue.
The new company, which is expected to be listed as CESP’s sole controlling shareholder, will have a diversified energy mix and will be positioned well for growth opportunities, including potentially acquiring other operational assets as well as assets under development and construction, the companies said.
João Schmidt, president of Votorantim, said the asset consolidation reflects the major role that the energy business will play in the company’s future.
“Globally, there is a growing urgency around renewable energy and the energy transition. Alongside a partner like CPP Investments, which has shared our long-term views on energy since 2017, we are ready to accelerate our role in the sector.”
Bruce Hogg, managing director, head of sustainable Energies at CPP Investments, said this transaction will create a diversified and well-capitalised platform primed for further growth in Brazil’s power sector.
“In addition, the new combined company provides an attractive way to grow our successful partnership with Votorantim, and we look forward to pursuing further investment opportunities in emerging technologies alongside them.”
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