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Private equity players ‘may bid for Celpa’
Posted on Wednesday, 30 May 2012 12:33
Private equity firms Vinci Partners Investimentos and GP Investments are in talks to buy Brazilan power business Centrais Elétricas do Pará (Celpa), which filed for bankruptcy in February, according to Bloomberg, citing two sources with knowledge of the development.
These people, speaking on condition of anonymity as the discussions are private, went on to say the funds plan to merge the utility with Companhia Energetica do Maranhao (Cemar), based in Sao Luis.
Vinci Partners owns a 65.0 per cent stake in Cemar through its energy-focused investment arm Equatorial Energia.
Celpa filed for bankruptcy protection on 28th February, as the debt-laden company stuggled to cope amid weak liquidity and over four years without a tariff increase.
The utility is majority-owned by Rede Energia, while Centrais Eletricas Brasileiras holds a minority interest.
Following the bankruptcy filing, Rede was forced to try and renegotiate dollar-bond terms, after Fitch downgraded the company’s credit rating to one level above default.
Another of the group’s subsidiaries, Centrais Elétricas Mato-Grossenses (Cemat) was also included in the downgrade, and the ratings agency said that the two were already experiencing a cash shortage which will be squeezed still further.
According to Zephyr, Equatorial Energia’s most recent deal was an agreement to acquire a 51.0 per cent interest in Solenergias Comercializadora de Energia, based in Rio de Janeiro.
It also has a 25.0 per cent stake in Geranorte, through which it operates in the electricity generation market.
GP Investments was formerly a shareholder in the business, before exiting in a three-phase operation that culminated in the sale of its remaining controlling stake to local investment fund PCP in December 2007.
© Zephus Ltd