Eletropaulo Gains as Court Blocks Loan Payment to EletrobrasJulia Leite
Eletropaulo Metropolitana Eletricidade de Sao Paulo SA rose the most in a week after a court order blocked a loan payment of as much as 1.3 billion reais ($659 million) to Centrais Eletricas Brasileiras SA.
Shares gained 0.6 percent to 12.69 reais at 1:56 p.m. in Sao Paulo, the most on a closing basis since Feb. 14. The benchmark Bovespa index retreated 0.6 percent.
Eletropaulo, Brazil’s largest electricity distributor, got a court order suspending a decision ordering it to pay off a loan taken out in 1986 from Eletrobras. The company isn’t making a provision for possible liability related to the loan, Eletropaulo said today in a regulatory filing today.
“We consider this an important victory for Eletropaulo,” Bradesco BBI analysts Vladimir Pinto and Marcelo Sa wrote in a research note today. “Had the lower-court decision not been overruled, the company would probably have to recognize a provision for the liability.”
Eletropaulo has fallen 66 percent in the past year as utility companies plunged while the Bovespa lost 16 percent during the same period.