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Investing.com -- Brazilian mining company Vale is reportedly in late-stage discussions to sell a majority share in its renewable energy subsidiary and a solar plant to US-based investment firm Global Infrastructure Partners (GIP). This information was shared by two individuals knowledgeable about the matter, according to Reuters.
Vale is contemplating selling a 70% stake in both Alianca Energia and the solar plant. Other energy companies, including Casa dos Ventos and China Three Gorges (SS:600116) (CTG) Brasil, had shown interest in this deal but are no longer contenders, according to sources.
Currently, Vale has decided to negotiate solely with GIP. However, the final contract is yet to be signed. Vale confirmed in a statement that it is looking for potential partners for Alianca, but no final decision or binding agreement has been made. GIP has chosen not to comment on the matter.
One source suggested that GIP might pay between 5-6 billion reais ($870 million to $1.04 billion) for the 70% stake in Alianca and the solar plant. Alianca operates a collection of hydroelectric power plants and wind farms, boasting a total installed capacity of nearly 1,300 megawatts.
The Brazilian news website Faria Lima Journal reported on Thursday that conversations between Vale and GIP are progressing.
Last year, Vale became the sole owner of Alianca after purchasing the 45% stake held by power firm Cemig for 2.7 billion reais ($470 million). The venture was initially launched by Vale and Cemig in 2013.
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