Brazil: Energias do Brasil boosts generation capacity with asset swap

20 June 2008

Sao Paulo, Brazil, 20 June – Brazilian electricity company Energias do Brasil, the Brazilian holding company for Portuguese group EDP – Energias de Portugal and Brazilian group Rede agreed an asset swap, with the former handing over a distributor and the latter giving up its majority stake in a power generator.

According to a statement, Energias do Brasil increased its stake in the voting capital of Hidroeléctrica do Lajeado, located in Tocantins state with a 902.5 megawatt capacity, from 27.65 percent to 73.05 percent.

In its turn, the Rede group was given control of power distribution company Enersul, in the state of Mato Grosso do Sul.

The Brazilian press reported that the deal is beneficial to both groups, as Energias do Brasil has reiterated its interest in boosting its power production whilst the Rede group aims to increase its presence in electricity distribution.

With the deal, Energias do Brasil has increased its total generation capacity from 1,043 MW to 1,690 MW, with generation now accounting for around 50 percent of earnings before interest, tax, depreciation and amortization (EBITDA).

The Brazilian press also said that handing over Enersul would also have a positive impact on the group’s accounts as as well as its stake in the distribution market being small in 2007 it posted a loss of 58.05 million reais.

Energias do Brasil has generation, distribution and sales assets in the states of Sao Paulo, Espirito Santo, Mato Grosso do Sul, Tocantins and Ceará. (macauhub)