History and Company Profile
On April 2019 Cemig completed the merger process of its wholly owned subsidiaries LEPSA and RME, terminating the purpose and obligations assumed in the Company’s Shareholders’ Agreement.
On July 2019, the primary and secondary Light’s follow-on process was completed. Cemig reduced its stake from 49.9% to 22.6% and BNDESPAR from 9.4% to 6.3%. Thus, Light became a company with capital distributed in the hands of several domestic and international shareholders.
On July 1, our Board of Directors approved the primary and secondary offering of shares. The primary offering comprised the issuance of 100,000,000 new common shares issued by us and the secondary offering initially comprised the sale of 11,111,111 common shares issued by us and held by CEMIG.
On July 11, the Board of Directors approved the follow-on transaction at a price per share of R$18.75. Accordingly, the capital increase totaled R$1,875 million, equivalent to the issuance of 100,000,000 new shares by us and the sale of 33,333,333 shares held by CEMIG. As a result, Light’s new capital stock totals R$4,051 million, divided in 303,934,060 common shares. The shares under the follow-on transactions started to be traded on B3 on July 15 and the delivery and settlement of the shares occurred on July 16.
In October, Light Energia sold all shares it held in Renova (17.17% of the capital stock) for R$1.00 to CG I Fundo de Investimento. Under this transaction, Lightcom assigned all credits held against Renova to CG I for R$1.00. This transaction is in line with the strategy of divestment of non-core assets and focus on the creation of value to shareholders through operational improvements in the distribution company.
On October 4, 2018, Light concluded the sale of Light Esco – Provision of Services S.A., to Ecogen Brasil Soluções Energéticas S.A., for approximately R$ 43 million.
On November 27, 2018, RME sold to the market 4,350 thousand shares, representing 2.13% of Light’s total capital, for approximately R$ 64.5 million. As a result, the total participation of CEMIG, LEPSA and RME in the Company increased to 49.99%.
On November 30, 2018, CEMIG acquired 100% of the common shares issued by RME, held by BB-BI, BV Financeira and Banco Santander, for approximately R$ 659 million. As a result, Cemig holds 100% of RME’s shares.
In November 2017, CEMIG acquired the shares issued by LEPSA and the preferred shares issued by RME, held by BB-BI, BV Financeira and Banco Santander, for approximately R$ 1 billion . With this acquisition, CEMIG increased its participation in RME from 66.27% to 75% of the total capital, while retaining 50% of RME’s voting capital, as well as increasing its participation in LEPSA from 66.62% to 100% of the total capital.
On November 30, 2016, CEMIG acquired the shares issued by RME and LEPSA, held by Banco BTG Pactual S.A., for R$ 202 million, corresponding to 153,634,195 preferred shares. With this acquisition, CEMIG increased its participation in RME from 60.65% to 66.27% of the total capital, while maintaining a 50% in RME’s voting capital, as well as increasing its participation in LEPSA from 61.06% to 66.62% of the total share capital, while maintaining its 50% in LEPSA´s voting capital.
On April 30, 2015, the Consortium UHE Itaocara, comprising the subsidiary Itaocara Energia Ltda., with a 51% interest, and Cemig Geração e Transmissão S.A., with the remaining 49%, was declared the winner of the A-5 Auction held by ANEEL, related to the Itaocara I hydroelectric power plant. The project will be built in the Paraíba do Sul River and will have an installed capacity of 150.0 MW, and assured energy of 93.4 MW average. The UHE Itaocara Consortium destined 95.5% of its assured energy to the Regulated Contracting Environment, at a selling price of R$ 154.99/MWh, with the Power Purchase Agreement starting in January 2020, and a supply period of 30 years. Operations are believed to start in the second quarter of 2018, and the total estimated investment is of R$ 1 billion.
On January 28, 2014, Light S.A. announced a shareholders’ agreement between the Company and Furnas Centrais Elétricas S.A. (“Furnas”) related to the management of the special purpose entity Energia Olímpica S.A. (“SPE Energia Olímpica”), whose purpose is the implementation, construction, operation and maintenance of a substation to supply electricity to the Rio de Janeiro Olympic Park.
On May 9, 2014, it was approved the contracting of the supply of equipment and services for the automation of aerial and underground networks through an Integrated System, using Smart Grids and Devices (“Smart Grid Project”), in its subsidiary, Light Eletricidade S.A. This equipment has the purpose of covering measuring and automation devices, allowing real-time analysis and contributing directly to reduce non-technical losses and delinquency, in addition to improving data management and quality.
In June and July 2014, Light came to prominence supplying energy during the World Cup. The organizational structure included approximately 1,000 professionals. Based on good strategic planning and tactical scheme, field teams located in strategic positions were responsible for inspections and preventive maintenance.
On July 24, 2014, Light S.A. sold 100% of its interest in CR Zongshen E-Power Fabricadora de Veículos S.A. (“E-Power”), equivalent to 20% of E-Power’s capital stock, to CR Zongshen Fabricadora de Veículos S.A. (“CR Zongshen”), extinguishing E-Power’s shareholders’ agreement between the Company and CR Zongshen, without any remaining obligations for the signatory parties.
On January 11, 2013, Light S.A. and Light Energy S.A. (“Light Energia” and, jointly with Light, the “Companies”) announced to the market in general that on that date Light Energia was granted by the Brazilian Securities and Exchange Commission (CVM) its registration as a publicly-held company, category “B”.
In 2013 the Light Legal project was consolidated. The project represents an important step taken by the company to fight commercial losses. In addition to electronic measuring, the project is applied in small areas called “Área de Perda Zero” (loss area zeroed) or “APZs”, with approximately 15,000 customers, and high levels of commercial losses and delinquency. During the year, the Light Legal project covered a total of 26 areas and 416,000 customers, showing significant results.
In generation, Light successfully renegotiated Light Energia’s interest in the capital stock of Renova Energia with RR Participações and CEMIG Geração e Transmissão. This transaction allowed CEMIG GT to enter Renova’s control block, enabling the acquisition of 51% of Brasil PCH’s stock and strengthening Renova’s cash to be allocated to wind power projects already contracted and new growth opportunities in renewable energy assets. After the transaction, Light Energia will hold between 11.7% and 15.9% of Renova Energia’s capital stock.
On August 8, 2013, Light returned the concession of UHE Itaocara, as the period remaining for the power plant’s implementation and operation does not ensure a profitable operation.
On May 12, 2011, Parati S.A. – Participações em Ativos de Energia Elétrica (“Parati”) acquired from the Fundo de Investimento em Participações – PCP (“FIP PCP”) 58,671,565 common shares, representing 54.08% of the total capital of Redentor Energia S.A. (“Redentor”), indirect shareholder of the Company, through its controlled company RME – Rio Minas Energia Participações S.A., which holds 13.03% of the Company’s capital.
On March 25, 2010, Cemig acquired from Andrade Gutierrez Concessões S.A. (“AGC”), the total of 25,494,500 common shares issued by the Company, representing 12.50% of its total and voting capital. On November 17, 2010, Cemig acquired the remaining 0.53% interest held by AGC. With that, Cemig now holds a direct interest of 26.06% in the Company.
On December 31, 2009, following the Extraordinary Shareholders’ Meeting the disproportionate partial spin-off of RME into three entities was approved. That action was followed by the incorporation of those split-offs by Companhia Energética de Minas Gerais (CEMIG), Andrade Gutierrez Concessões S.A. and Luce Empreendimentos e Participações S.A. (LEPSA).
On February 12, 2008, the Extraordinary General Meeting of Equatorial Energia S.A. approved the merger of PCP Energia, a company that holds 13.06% of Light’s shares through RME, into the Equatorial group. As from this moment, Equatorial is part of the controlling group of Light – RME. Said merger does not represent a transfer of control since both companies, PCP and Equatorial, belong to the same controlling company.
On March 28, 2006, a Share Purchase and Sale Agreement was entered into between EDF International S.A. (EDFI) and Rio Minas Energia Participações S.A. (RME), composed of Companhia Energética de Minas Gerais (Cemig), Andrade Gutierrez Concessões S.A. (AG Concessões), Pactual Energia Participações S.A. (Pactual Energia) and Luce Brasil Fundo de Investimentos em Participações (Luce). Thus, on August 10, 2006, the shares issued by Light and the quotas representing the capital stock of Lidil Comercial, owned by EDF, were transferred to RME-Rio Minas Energia Participações S.A., who become the new parent company of Light Group.
In 2005, Light concluded its deverticalization process, giving rise to the holding company Light S.A., parent company of the three operational companies: Light Energia S.A., liable for generation/transmission; Light Serviços de Eletricidade S.A., liable for distribution, and Light Esco Ltda. liable for commercialization, thus, composing the Grupo Light (Light Group).
After the period under federal government administration, Light was privatized, through an auction held on the Rio de Janeiro Stock Exchange on May 21, 1996, and its share control was transferred to a consortium composed of three multinational companies – Electricité de France (EDF), AES Corporation and Reliant Energy – and Companhia Siderúrgica Nacional (CSN). In February 2002, the corporate restructuring process was concluded, consolidating EDF as parent company of Light.
In addition to the trams, in 1918 the Company invested in electric buses that traveled through Avenida Rio Branco until 1927. In the previous year, the Company created the Viação Excelcior, the modern buses with bells and conductor and by the end of the 20s the double-decked buses. During that period the Company also started its telephony operations, until services started to being provided by the federal government in 1966.
On July 30, 1907, the Company, through Light, started to provide stable and safe electric power supply to Rio de Janeiro. In that same year, Light acquired and unified several urban tram companies that operated in the city, controlling the service until 1963, enlarging the urban area of Rio de Janeiro, and contributing to give rise to several neighborhoods, such as Leme, Copacabana, Ipanema and Leblon.
In order to operate in Brazil’s federal capital city at that time, The Rio de Janeiro Tramway, Light and Power Co. Ltd. was founded in Toronto, on June 9, 1904, and was authorized to operate in Rio de Janeiro on May 30, 1905. In that same year, the company acquired the share control of the gas lighting concessionaire, the Belgian Société Anonyme du Gaz de Rio de Janeiro, a service that was controlled by Light until 1969, when it was transferred to the state government and when the most modern hydroelectric power plant in the country started to be built, the Fontes Power Plant, located in the city of Piraí, state of Rio de Janeiro.
Light, more than one hundred years old, began its activities on July 17, 1899, through the Parnaíba Hydroelectric Power Plant, in Tietê river, built between 1899 and 1901.
The Company is an integrated company of the energy sector in Brazil, active in the segments of distribution, generation and commercialization of energy.
The concession area is concentrated in the State of Rio de Janeiro, which has an area of 43,781 km2 and a population of approximately 17.2 million people. The Company has the concession area of approximately 26% (11,307 thousand km2) of the State and serves a population of 11 million people. Of the 92 municipalities of the State with a total of 7 million consumers, the Company operates in 31 municipalities and has a base of around 4.5 million customers. The State of Rio de Janeiro has the second largest GDP in Brazil.
Total energy consumption in 2019 was 27,658 GWh, with the majority in captive segment, with 17,986 GWh and 7,257 GWh in the free market segment. The residential class represents 46.8% of the captive market consumption, followed by commercial class with 30.6%, other classes with 19.5% and industrial class representing 3.2%. Regarding consumption in the Total Billed Market in 2019, the Company may highlight: (i) residential class with 30.4%, (ii) commercial class with 28.5%, (iii) industrial class with 18.0% and (iv) concessionaires with 8.7%. The remainder equivalent to 14.4% is distributed in other classes.
The Company closed December 31, 2019 with net revenue of R$ 12.7 billion and Adjusted EBITDA of R$ 1,961.7 million. In the fiscal year ended December 31, 2018, net revenue was R$ 11.3 billion and Adjusted EBITDA was R$ 1,683.6 million.
Headquartered in the city of Rio de Janeiro, the Light Group is comprised of the holding company, Light SA, by its direct subsidiaries – Light Serviços de Eletricidade SA (the distribution company), Light Energia SA (the generation company), LightCom Comercializadora de Energia SA (the trading company), Light Conecta Ltda (a services and generation company), Light Soluções em Eletricidade Ltda. (a services company) and Light Institute (an institution) – and by jointly controlled companies: Lightger SA (responsible for the PCH Paracambi venture), Amazônia Energia Participações SA (for participation in the Belo Monte HPP project), Axxiom Soluções Tecnológicas SA (IT services) and Energia Olímpica SA (constituted for the implementation of the Vila Olímpica substation and two 138 k underground lines).