Caixa Economica Federal May Take Control of Rede Energia: Folha

State-controlled bank Caixa Economica Federal may have to take control of bankrupt Rede Energia SA (REDE4), Folha de Sao Paulo reported.

Caixa invested 600 million reais ($287.6 million) in Rede Energia in 2010 for a 25 percent stake in the power distributor. After Rede filed for bankruptcy protection on Nov. 23, Caixa requested its investment back as a clause in its contract provides for, the newspaper reported, without saying where it got the information.

Majority shareholder Jorge Queiroz de Moraes Jr. has 40 days to pay Caixa back 712 million reais, according to the report. Queiroz already said that he doesn’t have enough money. If the payment isn’t made, terms of the contract state Caixa may take control of the company.

To contact the reporter on this story: Denyse Godoy in Sao Paulo at dgodoy2@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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