Brazil’s Third Largest Electric Company in $1.49 Billion IPO

August 2, 2006

Cleary Gottlieb was counsel to UBS and Morgan Stanley in the initial public offering of Common Shares and Class B Preferred Shares of CESP – Companhia Energética de São Paulo. CESP raised R$3.2 billion (US$1.49 billion) in the offering. CESP’s controlling shareholder, the São Paulo State Government, purchased R$1.2 billion (US$558 million) in the offering in order to maintain a controlling interest in CESP.

CESP’s shares were offered to investors in Brazil, qualified institutional buyers in the United States under Rule 144A and institutional and other investors outside the United States under Regulation S. The shares are listed on the São Paulo Stock Exchange (BOVESPA). CESP is the third largest electricity generation and distribution company in Brazil, which is responsible for 9.3% of Brazil’s total electricity generation.