New York, 26 November 2014
Macquarie Group's ("Macquarie") (ASX:MQG; ADR:MQBKY) Energy Markets Division ("Macquarie Energy") today announced that it has entered into an agreement to acquire a minority interest in Nova Energia ("Nova"), a top 10 marketer and trader of electricity in Brazil.
"Nova has built a well-regarded and profitable electrical energy trading business with a strong market position," said Nick O'Kane, Global Head of Energy Markets, Macquarie Group. "The Nova partners understand the market dynamics and regulatory environment in Brazil and take a conservative approach to risk that complements our own strong risk management framework. We are pleased to be able to establish a strong foothold in Brazil by partnering with this experienced team."
Founded in 2009, Nova provides trading, risk management, and consultancy services to producers and consumers in the Brazilian electrical energy market. With offices in Sao Paulo and Recife, Nova accounts for more than 25 million MWh of electrical energy sold and manages over 1,800 MW of installed capacity. Nova's partners include Gustavo Doná Machado, André Bonaldo, Wagner Braz, Gustavo Coelho, Rafael Bispo and Glaucio Oliveira.
"We are delighted to enter into this transaction with an established player like Macquarie Energy," said Gustavo Machado , Partner, Nova Energia. "Macquarie Energy has a strong track record in the global commodities markets. We are confident that their expertise and market credibility will help us to further grow our market share and expand our presence in Brazil."
As part of the transaction, Macquarie Energy will have two seats on Nova's Board and minority shareholder rights. Macquarie Energy will provide Nova with additional expertise and input on managing credit, market and operational risks. Day-to-day management decisions will continue to be made by the current management of Nova. Nova will continue to manage its balance sheet independently.
The acquisition marks Macquarie Energy's entry into Brazil's electrical energy sector, but Macquarie has been active in Brazil since 1999. Through its representative office in São Paulo, Macquarie provides financial solutions for local Brazilian companies associated with global commodity markets, including pre-export financing, structured stock/ inventory financing and structured risk management products. Macquarie Agricultural Funds Management (MAFM) provides asset management services from offices in São Paulo and Ribeirão Preto.
"We feel the Brazilian power trading market represents a significant opportunity," added O'Kane. "We look forward to working with management as they continue to grow the business.
Terms of the transaction were not disclosed.
Nova Energia was founded in 2009 and in 2013 its revenues exceeded R$ 530 million, placing it among the largest power traders in Brazil. In addition to power trading and tailor-made solutions, renders management, representation before the CCEE (Power Trading Chamber), advisory and consultancy services to various agents in the power sector. It currently has in its portfolio the management of 55 assets considering large-scale power consumers; hydraulic, wind and gas power plants; and, especially, sugar-cane bagasse thermoelectric plants, totaling approximately 1800 MW of capacity - over 10% of all biomass generation market.