Otto Levy Reportedly Set for Cemig CEO Role as Minas Gerais Utility's Leadership Carousel Spins Again

For anyone tracking Brazilian state-controlled companies as an investable asset class, Cemig has become a case study in how governance turbulence can swirl around a business that, on paper, keeps delivering. The Minas Gerais power generator and distributor — listed in New York and widely held by foreign funds — is reportedly set to hand its top job to Otto Levy, an engineer and former state planning secretary, after he accepted an offer from governor-elect Cleitinho Azevedo. The catch: Cemig hasn't confirmed a thing, and the board, which formally elects the chief executive, hasn't voted. One local newspaper carries the story. That is the entire evidentiary base.

Levy's résumé is the kind Minas Gerais elites reward. A metallurgical engineer who finished first in his class at the Federal University of Minas Gerais, he spent a decade at refractories maker Magnesita, rising to director-general of operations in 2013, and earlier consulted at Falconi. He ran the state planning and management department under governor Romeu Zema from 2019 to 2021, where he sat in on the talks with miner Vale over compensation for the Brumadinho dam disaster, signed in February 2021. Since June 2021 he has been investments director at CSN Mineração. He would replace Marco Aurélio Vasconcelos, a lawyer drawn from the legal department of Copasa, the state water utility, whom the board elected on 11 September.

The churn is the story. Levy would be Cemig's third chief executive since the board replaced Reynaldo Passanezi on 7 May. Alexandre Ramos Peixoto, a career Cemig engineer, took the job that day and moved to chair the board in September. Then in late August the state, Cemig's controlling shareholder, floated engineer Marcio Nunes; local press reported objections from Cemig's legal, compliance and governance teams over court cases, and the board went with Vasconcelos instead. Outsiders should understand the structure behind this: Cemig is a mixed-capital company where private investors hold a large share but the state keeps control — 17.04% of all shares and 50.97% of the voting ones, per its investor site. The state can reshape the boardroom; minority holders can only watch.

The financials explain why the politics matter. Cemig reported second-quarter net profit of BRL 945 million (about US$177 million) in August, down from BRL 1.19 billion a year earlier. Adjusted EBITDA rose 9.3% to BRL 2.47 billion (about US$462 million), a figure that excludes one-offs such as a BRL 191 million provision for an arbitration case. Net debt reached BRL 19.4 billion (about US$3.6 billion), or 2.58 times adjusted EBITDA, versus 2.45 times at the end of March. The company raised BRL 4.6 billion of new debt and invested BRL 1.8 billion in the quarter, and in June declared BRL 631 million in interest on equity, a dividend-like payout. A profitable utility paying out cash while carrying leverage is exactly the kind of asset that tests whether management is stable or merely temporary.

Azevedo's politics add a layer. The senator won the governorship in the first round on 4 October with 55.4% of valid votes, and on 5 October ruled out privatising Cemig, saying the company makes a profit. He also asked why money left over at Cemig should not subsidise power bills — specialists quoted locally suggest this could run through a lower state sales tax or the dividends the state receives. For international readers, that is the tension to watch: a governor who wants the utility to fund household relief, a company that answers to minority shareholders, and a boardroom that has changed chiefs three times in five months. Levy may be the next name on the door. Whether he gets the vote — and how long he lasts — is the question capital will price.