CPFL Energia

CPFL Energia’s (CPFL) origin goes back to 1912, with the founding of Companhia
Paulista de Força e Luz (CPFL Paulista) following the merger of four domestically-owned
electricity distributors located in the upcountry area of the state of São Paulo. The com-
pany’s controlling group has since changed several times. Beginning in 1927, it was
acquired by US-based American Foreign Power Co., and, subsequently, the federally-
owned Eletrobrás (1964) then followed by the state-owned Companhia Energética do
Estado de São Paulo—CESP (1975) until the company was finally privatized in 1997.
At privatization, VBC Energia, 521 Participações and Bonaire Participações took a con-
trolling interest and, from that date forward, the company began an accelerated process
of expansion, culminating in August of 2002 in CPFL Energia’s creation as a holding
company for the generation, distribution and trading of electricity.
VBC Energia is a private company controlled by VBC Participações, the capital of
which is held by three major conglomerates representing Brazilian business interests:
Votorantim Energia Ltda., Bradesplan Participações S.A. and Camargo Corrêa S.A.
521 Participações S.A. represents the pension fund of the Banco do Brasil (Caixa de
Previdência dos Funcionários—Previ), the largest Brazilian pension fund with more
than 161 thousand beneficiaries.
Bonaire Participações S.A. is an investment fund made up of Brazilian pension funds
—Fundação Cesp—Funcesp, Fundação Petrobrás de Seguridade Social—Petros, Fundação
Sistel de Seguridade Social and Fundação Sabesp de Seguridade Social—Sabesprev.
In addition to these, BNDESPar, the holding company of the BNDES (National
Economic and Social Development Bank of Brazil) and the International Finance
Corporation (IFC) also currently feature among CPFL’s most important shareholders.
The company issued common shares (its only class of corporate share) and American
Depositary Receipt (ADRs) on the Novo Mercado, the highest corporate governance-
based tier of BOVESPA (São Paulo Stock Exchange), and New York Stock Exchange
(NYSE) (Level III) on 29 September 2004. CPFL made a primary offering of R$ 685
million (US$ 239 million) and a secondary offering of R$ 136 million
(US$ 47 million), for a combined total of R$ 821 million (US$ 286 million) at
R$ 17.22 per share (US$ 6.00 per share), with each ADR representing three shares.
The company’s initial free float was 13.64%. This has since risen to the current level
of 17.75%, thanks to the underwriters’ exercise of their overallotment option, resulting
in equity stake exchanges between the BNDESPar (minority shareholder) and VBC

24 Companies Circle