Friday, August 10, 2012

Equatorial Mulls Capital Increase For Brazil's Celpa Bid


Fri., August 10, 2012
Brazilian electricity utility Equatorial Energia is considering ways to beef up its capital, including selling stock, to make way for the purchase of debt-laden rival Celpa, two sources with knowledge of the situation said on Thursday, Reuters reported. A share sale would comply with rules for companies that list common shares in the São Paulo Stock Exchange. Alternatives include borrowing from banks in the form of bridge loans, said one of the sources, who declined to be named because the process is in the works. Some banks have already offered financing to the company, which has relatively low debt levels, the other source said. Reuters reported on Wednesday that Equatorial has 500 million reais (US$248 million) available to invest in Celpa, a power distribution company that serves the northern state of Pará and in February filed for bankruptcy protection. Creditors and the court overseeing the process set the minimum amount for any capital injection into Celpa at 650 million reais, a source said. Meeting that threshold would be key to allow a takeover of Celpa.

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