State Grid Successfully Completes the Public Offering of CPFL’s shares in Brazil
State Grid’s first public offering of large overseas listed company
On June 13, 2019 (Beijing time), CPFL, the company where State Grid Corporation of China ("State Grid") owns the controlling stake has successfully completed its public offering of shares in Brazil, CPFL’s shares return to market circulation, and CPFL will remain as a listed company. The offering price was 27.5 Brazilian Real (BRL) per share, the total offering scale was 3.2~3.7 billion BRL. As the operation performance of CPFL was highly recognized by investors around the globe, the demand for offering was high, with more than a hundred investors placed their orders.
According to Brazil’s securities law, a minimum of 15% of a listed company’s shares have to be in public circulation in order to maintain its listed status. With the public offering completed, State Grid’s shareholding of CPFL will be diluted from 94.75% to below 85%, meeting the market regulatory benchmark. CPFL Public Offering is the first public offering program of large overseas listed company carried out by State Grid, it is also the first time that a Chinese company practice public offering in Brazil. Without changing State Grid’s controlling position in CPFL, a large number of high-quality international investors from Brazil, North America, Australia and Asia were attracted to the company. CPFL’s public offering is an effective measure for State Grid to develop its new international business model. Valuable experience was gained for State Grid to carry out similar projects in the future; a solid foundation was forged for the company’s future development in Brazil.
CPFL is the largest power distribution and renewable energy company in Brazil, with its core business in power distribution and power generation sector. CPFL is an industry leader in Brazil’s electricity sector, delivering excellent performance indicators compare to its peers.
Since the acquisition in 2017, State Grid has been utilizing its comprehensive strengths in technology, management and credibility to improve and optimize CPFL’s operation efficiency, debt structure and credit rating, with CPFL’s financing cost reduced, operation efficiency and corporate value greatly boosted. In 2018, CPFL was awarded several industry prices by ANEEL, IBRC and mainstream Medias for its service quality and customer satisfaction rate. CPFL has also gain the title of “the Best Power Distribution Company” in that year.
The successful public offering of CPFL’s shares is an effective measure in State Grid’s pursuit for its strategic goals to become a world-class energy internet company serving as an energy-transforming hub, value-creating platform and benefit sharing community with the development of Strong & Smart Grid and Internet of Things in Electricity. It is a new milestone for State Grid’s “long-term development, market oriented and localization” operation methodology in practice, it is also a clear indication that State Grid’s adherence to the mutual-benefits, win-win cooperation and coordinated development principles in its overseas investment and operations is highly recognized by the international capital market. State Grid’s image as a responsible long-term industrial investor is also strengthened.
Sources: State Grid Department of International Cooperation, SGID, State Grid News