Eletropaulo Jumps as Loan Payment Is Suspended: Sao Paulo Mover
Eletropaulo Metropolitana SA jumped the most in three weeks after the Brazilian electric utility of AES Corp. (AES) said it won a court order suspending payment on a loan worth almost half the company’s market value pending an appeal.
Shares rose 4.7 percent to 15.29 reais at 1:26 p.m. in Sao Paulo after earlier advancing as much as 5 percent in the biggest intraday gain since Jan. 2. The benchmark Bovespa index slid 0.1 percent.
Eletropaulo, based in Sao Paulo, had been ordered in December by a Brazilian court to pay as much as 1.3 billion reais ($640 million) on a loan taken out in 1986 from state- controlled utility Centrais Eletricas Brasileiras SA (ELET6), known as Eletrobras. Eletropaulo said today it won suspension of the payment while a superior court examines the company’s appeal.
“The amount would have a very big impact on the company,” Pedro Galdi, the chief strategist at Sao Paulo-based brokerage SLW Corretora, said in a phone interview. “But it’s just a preliminary decision. Anything can happen.”
Eletropaulo has a market capitalization of 3.1 billion reais after the stock tumbled 61 percent last year amid a push by President Dilma Rousseff to cut power rates.
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