Band Leticia Fucuchima and Tatiana Bautzer

SAO PAULO, July 27 (Reuters) – The Brazilian holding company Auren Energia AURE3.SA presented a proposal to participate in the privatization auction of the CEEE-G generator set, based in the southern state of Rio Grande do Sul, two sources familiar with the matter said on Wednesday.

Auren Energia is controlled by Brazilian conglomerate Votorantim SA and Canada’s CPPIB.

EDF France EDF.PAwhich provided for a joint offer with the Brazilian steelmaker CSN CSNA3.SA at Friday’s auction, dropped earlier this week, the sources added, requesting anonymity to disclose private discussions.

Proposals to participate in the auction, with a minimum price of 837 million reais ($158 million), were presented on Tuesday. The auction will take place at the headquarters of the Brazilian stock exchange B3 on Friday afternoon.

The CEEE-G generator set has an installed capacity of 990 megawatts (MW), mainly from hydroelectric dams. Including stakes in other companies, its portfolio reaches 1.27 gigawatts (GW).

One of the sources said that Auren Energia sees value in CEEE-G energy which can be sold on the spot market. Auren owns one of the largest electricity trading companies in Brazil.

EDF had been interested in the generator since the regional government of Rio Grande do Sul tried to privatize the company last March.

But the company dropped the process earlier this week, one of the sources added. Although the reason is unclear, the ongoing nationalization of EDF by the French government is making it difficult to approve major new investments abroad, the source added.

Auren Energia, EDF and CSN did not immediately comment.

(Reporting by Leticia Fucuchima and Tatiana Bautzer Editing by Marguerita Choy)

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