Equatorial Rallies as Celpa Deal Cleared by Creditors in Brazil

Equatorial Energia SA (EQTL3), controlled by Brazilian private-equity firm Vinci Partners Investimentos Ltda., jumped the most in almost four years after creditors approved its takeover of Centrais Eletricas do Para SA (CELP3), or Celpa.

Equatorial, based in Rio de Janeiro, rose 8.3 percent to close at 16.85 reais in Sao Paulo trading, the steepest advance since Oct. 29, 2008. Celpa creditors voted Sept. 1 to accept Equatorial’s offer made in June, according to a regulatory filing today. Equatorial plans to merge Celpa, which operates under bankruptcy protection, with Cia. Energetica do Maranhao, or Cemar, the distributor it owns in the state of Maranhao.

The transaction requires approval from the Brazilian electricity regulator, Aneel. The regulator appointed on Aug. 31 administrators for eight distributors controlled by Celpa’s majority shareholder Rede Energia SA. (REDE4)

Celpa filed for bankruptcy protection Feb. 28 after a more than four-year freeze on rates pushed up debt to about 2.3 billion reais ($1.13 billion). Creditors include Societe Generale SA, Banco do Brasil SA, Bank of America Corp., Banco Bradesco SA and Itau Unibanco Holding SA, according to Celpa regulatory filings.

Rede rose 21 percent to 2.60 reais, the most since Dec. 7, 2011.

To contact the reporter on this story: Rodrigo Orihuela in Rio de Janeiro at rorihuela@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

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