Bank Refuses to Release Cemig Shares Held As Collateral, Blocking International Stock Sale.

BELO HORIZONTE, Brazil--(BUSINESS WIRE)--Dec. 30, 1996-- Companhia Energetica de Minas Gerais - CEMIG (OTC: CEMCY/Brazilian EX: CM13) today announced, as requested by the State of Minas Gerais, that Banco Nacional de Desenvolvimento Economico e Social (BNDES) has refused to release a block of Cemig shares pledged as a guarantee against debt -- a bond transaction issued by the State's holding company MGI -- blocking the sale of the Company's shares in the financial market by the State of Minas Gerais.

Cemig management said BNDES' decision came as a refusal to accept an extension in the term for repayment of the first tranche of the debt. BNDES had earlier given preliminary approval to the release of the shares.

The stock sale, which the State was not required to register, had been approved by the governing body of the State of Minas Gerais, owner of approximately 84 percent of Cemig's voting capital, and by the Comissao de Valores Mobiliarios (CVM) the Brazilian securities commission.

Further developments are being awaited with regard to what steps can be taken by the State concerning the negotiation of Cemig's shares.

CONTACT: Luiz Fernando Rolla, Asst. to CFO 

CEMIG

Tel. [phone]

Internet address: [e-mail]

or

Jane Valdez

The Anne McBride Company

Tel. [phone]

Internet address: [e-mail]