October 30, 2018 / 5:05 PM / 16 days ago

UPDATE 1-Brazil's Eletrobras to assume more debt to privatize distributor -source

(Adds Eletrobras will also try to overturn injunction, context)

By Rodrigo Viga Gaier Luciano Costa

RIO DE JANEIRO/SAO PAULO, Oct 30 (Reuters) - Brazilian state-controlled power holding company Centrais Elétricas Brasileiras SA may assume an additional 3 billion reais ($810 million) in debt to pave the way for the privatization of a distribution company, a source familiar with the matter said on Tuesday.

Eletrobras, as the holding is known, will take on the debt the distribution company, based in the northern state of Amazonas, has with state-controlled oil company Petroleo Brasileiro SA (Petrobras) as a way to entice investors into the privatization, said the source, who asked for anonymity because they are not authorized to discuss the matter publicly.

An auction is scheduled for Nov. 27, the source added.

Eletrobras did not immediately respond to requests for comment.

Eletrobras, which has been seeking to offload heavily indebted distributors ahead of government plans to privatize the overall company, has already assumed 8.9 billion reais in debt owed by the Amazonas distributor.

Earlier this month, the Senate rejected a bill that would have absolved the distributor from being responsible for debt incurred by it when buying fuel from Petrobras.

So Eletrobras is now planning to assume the debt and attempt to cancel the responsibility for it in the courts, the source added.

A second person with knowledge of the matter said Eletrobras will also try to overturn an injunction by Supreme Court Justice Ricardo Lewandowski that is blocking the privatization of another distribution company in the northeastern state of Alagoas.

In June, the judge ruled that sale of shares of state-controlled companies must be approved by Congress. ($1 = 3.7056 reais) (Reporting by Luciano Costa in Sao Paulo and Rodrigo Viga Gaier in Rio de Janeiro; Writing by Tatiana Bautzer, Editing by Rosalba O'Brien)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below