A leading Brazilian private-equity fund that controls local electricity utility Equatorial Energia is considering bidding for debt-laden power distributor Celpa, two sources with knowledge of the situation said on Tuesday.
Celpa, a unit of power holding company Rede Energia serving the northern state of Pará, filed for bankruptcy protection in February, citing a deterioration in its finances. The company presented this month a debt restructuring plan to a court in that state to win Celpa more time to pay its debt.
Equatorial is gauging its options on Celpa, said one of the sources, who declined to be quoted because of the sensitivity of the issue. The other source said Vinci Partners, the buyout firm led by financier Gilberto Sayão and which controls Equatorial, is spearheading the negotiations.
Celpa has long been considered a takeover target as the government and private companies boost their market share in power distribution, a segment in which bigger scale offsets the outlook for lower revenue in coming years. Consolidation is key for the companies, known as DisCos, to gain financial and operating muscle.
Vinci's interest in Celpa comes weeks after another private-equity firm, Laep Investments, said it might bid for Celpa to facilitate an accord between creditors and Jorge Queiroz Jr., Rede Energia's controlling shareholder. Laep invests mainly in distressed companies.
Private equity firms have been seen by many investors as the most likely buyers of Celpa because of their perceived ability to turn around companies on the brink of bankruptcy.
The lack of firm bids has prevented Queiroz, who is also Rede Energia's chairman, from selling part or all of his 54 percent stake. The government opposes bailing out Celpa.
The media office of Celpa declined to comment. Equatorial's press representatives did not have an immediate comment on the matter. Calls made to a Vinci spokesman in Rio de Janeiro were not immediately answered.
This article is copyrighted by Reuters
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