Brazil to Weigh Celpa Requests as Judge Seeks Bid Resolution
Brazil’s electricity regulator will consider next week requests by Equatorial Energia SA (EQTL3) regarding a bid to take over the biggest distributor in the country’s Amazon region following a judge’s request to accelerate the process.
Equatorial has requested an easing of service targets and fines during a transitional period as part of its offer to take over Centrais Eletricas do Para SA (CELP5), or Celpa, which is operating under bankruptcy protection, Nelson Hubner, director of the regulator known as Aneel, told reporters yesterday.
Equatorial’s bid needs to be accepted by creditors and shareholders of Celpa, which distributes electricity to 7.4 million people in northern Brazil. A creditors meeting to discuss the bid was rescheduled yesterday for the third time after Judge Maria Filomena De Almeida Buarque said certain regulatory procedures have not been completed. The judge doesn’t want to postpone the meeting again and asked Aneel to make a decision by Aug. 31, Hubner said.
Equatorial, which is controlled by private equity fund Vinci Partners Investimentos Ltda, made an offer in June to take over Celpa. Equatorial plans to merge Celpa with Sao Luis, Brazil-based Cia Energetica do Maranhao, known as Cemar, two people familiar with the deal told Bloomberg in June.
Celpa filed for bankruptcy Feb. 28 after more than four years without tariff increases contributed to debt rising to about 2.3 billion reais. 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.
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