SAO PAULO, BRAZIL -- The reluctance of Renova Energia SA's largest shareholder to give up management of the debt-laden Brazilian renewable power firm threatens to derail takeover talks with Brookfield Asset Management Inc (BAMa.TO), three people familiar with the matter said on Thursday.

Power utility Cia Energética de Minas Gerais SA wants to be part of a Brookfield-led turnaround of Renova, two of the people said. The utility known as Cemig owns 34.2 per cent of Renova.

That stance could sink Brookfield's proposed 1.6 billion-real (US$499-million) cash offer for control of Renova, the people said. Cemig plans to first sound out interest from distressed debt giant Oaktree Capital Management LP and two other unidentified funds in Renova, two of the people said.

Reuters reported on Friday that Canada-based Brookfield would buy out the combined 63.5 per cent that Cemig, Light SA and RR Participações SA have in Renova for 810 million reais. Brookfield would then pump an additional 800 million reais into Renova to win full management rights.

Cemig and Brookfield declined to comment. Rio de Janeiro-based Light referred questions on Renova to Cemig, which also controls it.

Snubbing Brookfield, which has made a number of high-profile infrastructure and energy takeovers in Brazil in the past year, is "risky for Renova since it faces a heavy repayment calendar and a fragile cash position," said one of the people, who asked for anonymity due to the sensitivity of the matter.

Renova's units, the company's most widely-traded class of stock, have gained almost 30 per cent since Jan. 2, on expectations a takeover could save the company from a chronic cash shortage or even bankruptcy. Reuters first reported that Renova could be taken over on March 1.

Renova has struggled with a severe cash crunch over the past couple of years. Financing conditions for Renova, which was founded in 2001, worsened significantly when a partnership with SunEdison Inc (SUNEQ.PK) collapsed weeks before the latter filed for bankruptcy protection in the United States.

Exiting Renova would allow Cemig, Brazil's No. 3 power utility, to facilitate the refinancing of almost five billion reais of debt maturing this year. This week, Chief Financial Officer Adezio Lima said the partial or full sale of Cemig's and Light's stakes in Renova could take up to 60 days.

Interest in Brazil's renewable power industry is growing, especially among foreign investors who see it as a resilient play despite declining electricity consumption and a harsh recession.