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The talks between Brazil’s national development bank BNDES and the SEB consortium over the settlement of a US$750mn debt does not involve changes in the shareholding structure of Brazilian power company Cemig.

SEB, a consortium made up of US power companies AES and Mirant and Brazilian investment bank Opportunity, owes BNDES a US$750mn. The group had taken the loan with the Brazilian bank to acquire a US$1bn, 33% voting right stake in Cemig in 1997. At the time, SEB and state-controlled Cemig had signed a shareholders’ agreement to allow SEB to influence managerial decisions in the company.

The source denied local press reports that the negotiations could include the sale of the stake to BNDES in exchange for writing off the debt.

In May 2003, SEB decided to stop repaying the loan because of a political dispute following a decision by the then Minas Gerais state government to break the shareholders’ agreement in 2000.

BNDES has said it was suing SEB over the debt. However, the suit will not stop talks and there is no schedule for them to end.

Talks “may go on until the end of this year, because they are only starting now,” a source claims.