Exhibit 4.20


 


ANNOUNCEMENT
OF COMMENCEMENT OF PUBLIC DISTRIBUTION OF THE


SECOND
ISSUE OF DEBENTURES BY


 





 


Listed company


CNPJ/MF n° 06.981.180/0001-16


Avenida Barbacena 1200, A1 Wing, 17th Floor,


30190-131 Belo Horizonte, Minas Gerais, Brazil.


 


ISIN: no BRCMGDDBS017


 


BB BANCO DE INVESTIMENTO S.A. (“the Lead Manager”), hereby announces the
distribution on today’s date of 40,000 (forty thousand) non-convertible
debentures of the Second Issue by CEMIG
DISTRIBUIÇÃO S.A. (“the
Offering”, “the Issue”
and “the Company”), being
unsecured, nominal, book-entry Debentures (“the Debentures”), in a
single series, with nominal unit value of R$10,000.00 (ten thousand Reais),
comprising a total, on the Issue Date, namely December 15, 2007 (“the Issue Date”), of:


 


R$ 400,000,000.00


 


Rating:  Fitch :
A+(bra)


 

















 


1.             DECISION AND DEED OF
THE ISSUE


 


1.1.          Corporate decisions: The Offer was approved
at the meeting of the Board of Directors of the Issuer held on August 30,
2007, the minutes of which were ratified by the meeting of the Board of
Directors of the Issuer held on October 30, 2006. The meeting of the Board
of Directors of the Issuer held on December 13, 2007, decided the final
interest rate for Remuneratory Interest (as defined below).


 


1.2           Issue Deed and Amendment to the Deed: The
terms and conditions of the Debentures are contained in the Private Deed of the
Second Public Issue of Non-Convertible Debentures, in a Single Series,
unsecured, of Cemig Distribuição
S.A. (“the
Deed”) and the First Amendment to the Private Deed of the
Second Public Issue of Non-Convertible Debentures, in a Single Series,
unsecured, of Cemig Distribuição
S.A.  (“the Amendment to the Deed”),
signed, respectively on November 12, 2007 and December 13,
2007 between the Issuer and SLW
Corretora de Valores e Câmbio Ltda. (“the
Fiduciary Agent”), and the Deed was filed with the Commercial Board
of the State of Minas Gerais  under
no. ED000043-4/000 on November 21, 2007 and the Amendment to the Deed was
submitted for registration under no. 07/459.087-1, on December 13, 2007.


 


2.             CHARACTERISTICS OF
THE DEBENTURES


 


2.1.          Issue Date: December 15th,
2007 (“the Issue Date”).


 


2.2           Nominal unit value:
R$ 10,000.00 (ten thousand Reais), on the Issue Date (“the Nominal Unit
Value”).


 


2.3           Number of Debentures:
40,000 (forty thousand) Debentures will be issued, so that the total value of
the Issue is R$ 400,000,000.00 (four hundred million Reais).


 


2.4           Increase in the
Quantity of Debentures: There will be no possibility of increase in the
Quantity of Debentures to be distributed under this Offering as a result of
excess of demand, neither at the option of the Issuer (under the terms of Article 14
of CVM Instruction 400), nor at the option of the Lead Manager (under the terms
of Article 24 of CVM Instruction 400).


 


2.5           Number of Series: The Offering will be made in a
single series.


 


2.6           Period and Date of
Maturity: The period of maturity of the Debentures of this Issue is 120
(one hundred and twenty) months from the Issue Date, with final maturity on December 15,
2017 (“the Maturity Date”). On the Maturity Date, the Issuer undertakes
to pay such Debentures as are still in circulation, for their Nominal Unit
Value, plus the due Remuneration (as defined below).


 


2.7           Form and Type:
The Debentures will be issued in Nominal form and will be of the book-entry
type, without issue of deposits or certificates.


 


2.8           Convertibility:
The Debentures will not be convertible into shares.


 


2.9           Unsecured: The
Debentures will be of the unsecured type.


 


2.10         Registry for
Distribution and Trading: The Debentures shall have registry: (a) for
placement on the primary market through the Securities Distribution System
(SDT), administered
by the Custody and Settlement Chamber (“Cetip”), based on the policies
and directives set by the Brazilian Association of Financial Market
Institutions (“Andima”), and the Debentures will be paid up, settled and
held in custody at Cetip; and (b) for trading, in the secondary market, (i) through
the National Debentures System (SND), administered by Cetip, based on the policies
and directives set by Andima, the Debentures being settled and held in custody
at Cetip; and/or (ii) through the Bovespafix system, with the Debentures
being settled and held in custody at the CBLC (Brazilian Settlement and Custody
Company).


 


2.11         Collection of
investment intentions: The procedure of Bookbuilding was adopted, organized
by the Lead Manager, through collection of investment intentions, in the terms
of Paragraphs 1 and 2 of Article 23 and Article 44 of CVM
Instruction 400, without receipt of anticipated reservations, nor minimum
nor maximum lots (“the Bookbuilding Procedure”). The Bookbuilding
Procedure was effected with
the objective of determining the final rate used for the purpose of calculation
of the Remuneration Interest (as defined below), of the Debentures, resulting
in the rate of 7.96% (seven point nine six per cent), which was the rate


 

















 


equivalent to the lowest of the rates
offered by the institutions participating in the process for lots of Debentures
the sum of which is equal to or greater than the total number of the Debentures
offered.


 


2.12         Placement period:
The period of placement of the Debentures shall be up to 5 (five) business
days, from the date of publication of this announcement of opening of
distribution of the Debentures (“the Placement Period”, and “the
Opening Announcement”). After the full placement of the Debentures the
respective announcement of closing of the distribution of the Debentures (“the
Closing Announcement”) will be published.


 


2.13         Distribution Procedure: The Debentures shall be the subject
of a public distribution, under the firm guarantee distribution regime, with
intermediation by a financial institution that is part of the system of
distribution of securities, through the SDT, administered by Cetip, based on
the policies and directives fixed by Andima, using the procedure specified in
paragraph 3 of Article 33 on CVM Instruction 400, and according to
the distribution plan prepared by the Lead Manager, which shall take into
consideration its relationships with clients and other aspects of a commercial
nature, and also the strategies of the Lead Manager and the Issuer, subject to
the terms and conditions defined in the Contract for Management,
Placement and Distribution of Non-Convertible Debentures under the Firm
Guarantee Regime, for the Second Public Issue by CEMIG Distribuição S.A
(“the Distribution Contract”), and the Offering shall be carried out in
accordance with the result of the Bookbuilding
Procedure.


 


2.14         Subscription price and
form of paying up: All the debentures shall be subscribed in the primary
market for their Nominal Unit Value, plus the Remuneration, calculated pro rata temporis, from the Issue Date up
to the date of their actual paying up, which shall be at sight, in Brazilian
currency, simultaneously with the subscription period.


 


2.15         Amortization of the
principal: The Nominal Unit Value of the Debentures shall be amortized in 3
(three) equal, annual and consecutive installments, the first becoming due on December 15,
2015 (each one of these dates being an “Amortization Date”).


 


2.16         Remuneration: The
Debentures will be remunerated in accordance with the following: (a) Monetary
Updating: the Nominal Unit Value of the Debentures shall be updated, from the
Issue Date or from the date of expiry of the most recent Capitalization Period,
as the case may be, up to the date of their actual payment, by the IPCA
(Amplified National Consumer Price) Index, calculated and published by the IBGE
(Brazilian Geography and Statistics Institute) (the “Updating”). The
Updating of the Debentures shall be calculated pro rata
temporis, by business days, according to the formula specified in
Clause 4.1.9.1 of the Deed and shall be paid proportionately by the Issuer
jointly with the Nominal Unit Value of the Debentures, on the same Amortization
Dates of the Debentures, the first taking place on December 15, 2015 and
the last on the Maturity Date; and (b) Remuneration Interest: The
Debentures shall have Remuneration Interest calculated at the rate of 7.96%
(seven point nine six per cent) per year, as defined by a Bookbuilding
Procedure (“the Remuneration Interest” and, jointly with the Updating, “the
Remuneration”), calculated exponentially and cumulatively pro rata temporis by business days expired, based on a
year of 252 business days, applicable to the Nominal Unit Value of the
Debentures plus the Updating, from the Issue Date, or on the balance of the
Nominal Unit Value, from the Date of Maturity of the last capitalization period
as the case may be, up to the date of its actual payment. The Remuneratory
Interest shall be calculated in accordance with the formula contained in Clause
4.1.9.2 of the Deed and shall be paid annually, starting from the Issue Date,
on December 15 of each year, the first payment taking place on December 15,
2008, and the last on the Maturity Date. For the purposes of setting the price
of distribution of the Debentures, in the Bookbuilding Process investment
intentions from persons linked to the Offering were not accepted – defined as
those referred to by Clause 55 of CVM Instruction 400, with the exception of
the intermediaries contracted with firm guarantee clause for subscription of
the Debentures.


 


2.17         Renegotiation:
There will be no programmed renegotiation of the Debentures.


 


2.18         Extraordinary
amortization: There will be no possibility of the Issuer amortizing the
non-amortized Nominal Unit Value of the Debentures on any date other than the
Amortization Dates.


 


2.19         Optional early
redemption: The Debentures of this Issue will not be subject to optional
early redemption by the Issuer.


 


2.20        Early
maturity:


 


Subject to items 2.20.1,
2.20.1.1 and 2.20.2 below, the fiduciary agent shall declare all the
obligations relating to the Debenture to become due for payment immediately and
demand immediate repayment by the Issuer of the debtor balance of the nominal
unit value of the Debentures, plus the Remuneration, due up to the date of
actual payment, calculated pro rata temporis from the Issue Date or from the start of
the respective Capitalization Period, and other charges, independently
of advice, contestation or notification within or


 

















 


outside the Courts, in
any of the following events: (each event being referred to as a “Default
Event”):


 


(a)   declaration
of bankruptcy, dissolution and/or liquidation of the Issuer or application for
Judicial Recovery or out-of-Court reorganization of the Issuer of an
application for bankruptcy made by the Issuer, or any analogous event that
characterizes a state of insolvency of the Issuer, in accordance with the
applicable legislation;


 


(b)   non-compliance
by the Issuer with any pecuniary obligation related to the Debentures;


 


(c)   early
maturity of any debt of the Issue in an amount of R$50,000,000.00 (fifty
million Reais) or more, or its equivalent in other currencies, due to any
non-compliance, contractual or otherwise;


 


(d)   termination,
for any reason, of any of the concession contracts to which the Issuer is a
party representing separately or jointly an amount equal to 30% (thirty per
cent) or more of the net operational revenue of the Issuer as stated in its
last prior financial statements;


 


(e)   legitimate
protest of securities against the Issuer, in an amount exceeding
R$50,000,000.00 (fifty million Reais) or its equivalent in other currencies,
unless made in error or bad faith of a third party validly proven by the
Issuer, as the case may be, or unless suspended or cancelled, or unless a
guarantee for the security(ies) be given in Court, under any circumstances,
within a maximum of 30 (thirty) calendar days from the date on which the
written notice sent by the Fiduciary Agent is received;


 


(f)    non-compliance
by the Issuer or by Cemig with any non-pecuniary obligations specified in the
Issue Deed, not cured in 30 (thirty) calendar days from the date of the written
notice sent by the Fiduciary Agent to the issuer to this effect;


 


(g)   if
the Issuer omits to pay by the maturity date, or does not take the legal or
judicial measures required for non-payment in relation to, any debt or any
other obligation payable by the Issuer under any agreement or contract to which
it is a party as a lender, borrower, or guarantor, involving an amount of
R$50,000,000.00 (fifty million Reais) or more or its equivalent in other
currencies; and/or


 


(h)   privatization,
merger, liquidation, dissolution, extinction, split and/or any form of
stockholding reorganization which results in reduction of the registered
capital of the Issuer, for the purposes of this sub-clause “privatization”
being understood as an event in which (i) the present direct controlling
stockholder of the Issuer, Companhia Energética de Minas Gerais – Cemig (“Cemig”),
ceases directly or indirectly to hold the equivalent of at least 50% (fifty per
cent) plus one of the total shares representing the voting stock of the Issuer;
and/or (ii) the present controlling stockholder of Cemig, the government
of the State of Minas Gerais, ceases directly or indirectly to hold the
equivalent of at least 50% (fifty per cent) plus one of the total of the shares
representing the voting capital of Cemig.


 


2.20.1
The occurrence of any Default Event indicated in sub-items (a), (b) e (c) above
shall result in automatic early maturity of the Debentures, independently of
any Court or out-of-court notice, or any consultation of the Debenture holders.


 


2.20.1.1
If any of the other Default Events (other than those specified in item 2.20.1
above) take place, the Fiduciary Agent shall call, within 48 (forty eight)
hours of the date on which it becomes aware of such event, a General Meeting of
Debenture Holders to decide on declaration of early maturity of the Debentures,
subject to the procedure for convocation specified in Clause VIII of the Issue
Deed and the specific quorum established in item 2.20.2 below.


 


2.20.2
After the General Meeting of Debenture Holders mentioned in item 2.20.1.1 above
has been held, the Fiduciary Agent shall declare early maturity of all the
obligations arising from the Debentures and demand immediate payment by the
Issuer of the Nominal Unit value of the Debentures, plus the Remuneration and
charges up to the date of actual payment, in accordance with item 2.20 above,
unless Debenture Holders representing at least 2/3 (two-thirds) of the
Debentures in circulation (as defined in the Deed) opt not to declare early
maturity of the obligations arising from the Debentures.


 


2.20.2.1
If the Debenture Holders of the present Issue opt not to declare early maturity
of the obligations arising from the Debentures, under item 2.20.2 above, the
Debentures held by the Debenture Holders who do not agree with that decision
shall be redeemed by the Issuer within a maximum of 30 (thirty) calendar days
from the date of the holding of the General Meeting of Debenture Holders. The


 

















 


Debentures
shall be redeemed for their nominal unit value plus the remuneration owed,
calculated pro rata temporis from the Issue Date or the date of the start
of the respective Capitalization Period, up to the date of actual redemption.


 


2.20.3
If the General Meeting of Debenture Holders does not take place as specified in
item 2.20.2. above, or if: (a) it is not called; (b) there is no
decision on the date originally established for its being held; or (c) there
is no quorum, where any of these events arises from an act or event not
imputable to the Fiduciary Agent, the Fiduciary Agent shall declare early
maturity of all the obligations arising from the Debentures, and the provisions
of item 2.20.4 below shall apply.


 


2.20.4
In the event of early maturity of the Debentures, the Issuer undertakes to redeem
the totality of the Debentures in circulation (as defined in the Deed) with
their consequent cancellation, by payment of the balance of the Nominal Unit
Value of the Debentures in circulation (as defined in the Deed), plus the
Remuneration, calculated pro rata temporis
from the Issue Date or from the date of the start of the respective
Capitalization Period, up to the date of its actual payment, plus any other
amounts owed by the Issuer under the Deed, including the charges for arrears
therein established.


 


2.21         Target Investor Public
for the Offering: The Target Public of the Offering is made up of
institutional or qualified investors, as defined in Article 109 of CVM
Instruction 409, of August 18, 2004, as amended, but debentures may be
placed with other non-qualified investors, investment funds, private
individuals or legal entities, whether or not clients of the institutions that
adhere to the distribution contract, if they are aware of the terms, conditions
and risks inherent to the Debentures, and also have access to the prospectuses
relating to the Offering.


 


2.22         Inappropriateness
of investment in the Debentures:


 


The Debentures that are the subject of the present
Offer are not appropriate for investors who need considerable liquidity in
relation to the securities acquired, since trading of Debentures in the
Brazilian secondary market is restricted.


 


Investors should read the Risk Factors
section of the Final Prospectus, which is available to investors as stated in
item 6 below.


 


2.23         Use of Proceeds:
The funds obtained from the Offering will be used, in their entirety, to pay
the remaining debtor balance of the promissory notes issued under the Third
Public Issue of Promissory Notes of Cemig Distribuição S.A., subject to the
provisions of Clause 3.5 of the Deed.


 

















 


3.             THE LEAD MANAGER


 


BB Banco de Investimento S.A.

Rua Senador Dantas
105, 36th Floor - Centro, Rio de Janeiro, Rio de Janeiro State

Att: Mr. Alexandre Wanzeller Casali

Telephone: (21) 3808-2742 - Fax: (21) 3808-3239

E-mail: acasali@bb.com.br


 


4.             MANDATED BANK


 


Banco Bradesco S.A.

Cidade de Deus –
Prédio Amarelo – 2nd Floor - Osasco, SP - CEP: 06029-900Att.: Mr. José Donizetti de
Oliveira

Telephone: (11) 3684-3749 - Fax: (11) 3684-2714E-mail:
4010.donizetti@bradesco.com.br


 


5.             FIDUCIARY AGENT


 


SLW Corretora de Valores e Câmbio Ltda.

Rua Dr. Renato
Paes de Barros 717, 6th to 10th Floors 

Itaim Bibi, São Paulo, São
Paulo State - CEP: 04530-001Att.: Mr. Felipe Coimbra Aloi André

Telephone: (11) 3048-9763 / 3048-9915 - Fax: (11) 3048-9888E-mail:
slw@slw.com.br


 


6.             ADDITIONAL
INFORMATION


 


For additional
information on the Offering and the Debentures, and also to consult the
Definitive Prospectus, interested parties should contact the CVM, the Issuer,
Cetip, or the head office of the Lead Manager, at the addresses given in this
announcement.


 


CEMIG Distribuição S.A. 

Av.
Barbacena 1200, 17th Floor, A1 Wing 

Belo Horizonte, Minas Gerais
State - CEP: 30190-131

Att.: Sr. Paulo Eduardo Pereira Guimarães

Telephone: (31)
3506-4105 - Fax: (31) 3506-5068

E-mail: peduardo@cemig.com.br

Web:http://cemigd.infoinvest.com.br


 


CETIP
– Câmara de Custódia e Liquidação

Rua Líbero Badaró
425, 24th Floor - São Paulo, São Paulo State 

Telephone: (11)
3111-1596 - Fax: (11) 3115-1564 

Email:  gr.debentures@cetip.com.br

Web: www.cetip.com.br


 


CVM –
Rio de Janeiro – RJ

Rua Sete de
Setembro 111, 5th Floor - Rio de Janeiro, Rio de Janeiro State

Web: www.cvm.gov.br


 


CVM –
São Paulo – SP

Rua Cincinato
Braga 340 – 2nd-4th Floors - Edifício Delta Plaza - São
Paulo, São Paulo State

Web: www.cvm.gov.br


 


The Prospectus of the Offering is available to
investors at the CVM for consultation and reproduction only


 


7.             DATE OF COMMENCEMENT
OF THE OFFERING


 


The Commencement Date of
the Offering is December 19, 2007.


 

















 


8.             REGISTRY OF THE OFFER
WITH THE CVM


 


The offering was registered with
the Brazilian Securities Commission (CVM) on December 17, 2007, under
number CVM/SRE/DEB/2007/048.


 


Registry of this distribution does not imply any
guarantee by the CVM of the truthfulness of the information given nor any
judgment on the quality of the issuer, nor on the debentures to be distributed.


 


	
  

  	
  The present Public Offer or program was prepared in
  accordance with the terms of the Self-Regulation Code of Anbid for Public
  Offers for distribution and acquisition of securities, which has been
  registered at the 4th Registry Office for Securities and Documents of the
  district of São Paulo, São Paulo State, under No. 4890254, and the
  present Public Offer/program thus complies with the minimum standards of
  information contained in the Code, and Anbid has no responsibility for the
  said information, for the quality of the Issuer and/or the Offering
  party/ies, nor of the participating institutions nor the securities that are
  the subject of the present Public Offer/program.

  



 


THE LEAD
MANAGER