Brazil's CPFL, Equatorial seek control of Rede Energia

Thu Oct 11, 2012 9:03pm EDT

* Control of troubled power company depends on restructuring

* Rede Energia in turmoil after regulator seized eight units

RIO DE JANEIRO Oct 11 (Reuters) - Grupo Rede Energia has signed a letter of understanding for the possible sale of the troubled Brazilian power company to two other Brazilian utilities.

In a securities filing late on Thursday, Grupo Rede Energia said CPFL Energia and Equatorial Energia will seek to buy stakes if an ongoing restructuring plan for the debt-laden holding company is approved by Brazil's electricity regulator.

If the sale is completed, the statement added, CPFL and Equatorial - both holding companies with power concessions in multiple Brazilian states - together would take control of Rede Energia.

Details of any transaction also depend on the turnaround plan's approval.

In late August, Brazilian energy regulator Aneel seized eight units of Rede Energia in efforts to prevent a halt in electricity service in six states.

The units, power distributors spread throughout the country, are all suffering from serious financial and operational problems.

Equatorial in September agreed to acquire Celpa, the only Rede Energia unit the regulator had not seized, for the token value of 1 real. Celpa, a power distributor in the northeastern state of Para, was already under bankruptcy restructuring when the regulator seized the other units.

($1 = 2.04 Brazilian reais) (Reporting By Paulo Prada)

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