Bismarck, N.D., November 16, 2010 — MDU Resources Group closed on the sale of its ownership interests in three electric transmission lines in Brazil. Two buyers have purchased 84.4 percent of the company’s ownership interests for about $70 million.
One buyer will purchase the remaining 15.6 percent of the company’s ownership interests in equal annual installments over a four-year period. Proceeds from this sale would be equivalent to an additional $12.7 million at today’s exchange rate.
“The sale generates a significant amount of cash and provides a good return on our investment in Brazil,” said Terry D. Hildestad, president and CEO of MDU Resources. “We intend to use the cash to fund growth opportunities in our domestic businesses.”
The transmission lines are located primarily in northeastern and southern Brazil. In 2006 the company acquired a 13.3 percent ownership interest in two of the lines, and a 25 percent ownership in the third line.
The purchasers are existing partners in the transmission lines: Companhia Energetica de Minas Gerais, Centrais Electricias de Santa Catarina S.A. and Alupar Investimentos S.A.
Initial sales agreements were signed in the fourth quarter of 2009, and have been awaiting various regulatory approvals. Specific terms of the sale are not being disclosed.
“Our overseas investments have performed well for shareholders,” Hildestad said. “We have been fortunate to have good partners such as the board of directors and senior management of CEMIG, as well as CELESC and Alupar. In addition, our local advisory board and professional management team deserve credit for providing exceptional service to the company during the time we owned assets in Brazil.”