Dec 19 Equatorial Energia will gain a controlling stake in troubled power company Grupo Rede Energia under an agreement between the two companies and CPFL Energia, according to a securities filing by CPFL on Wednesday.
Equatorial acquired control for the token value of 1 real.
CPFL and Equatorial, both holding companies with power concessions in multiple Brazilian states, will make the necessary investment to restore Rede Energia's financial viability, the filing said.
Debt-laden Rede Energia has been in turmoil since Brazilian energy regulator Aneel seized eight of its units in August in an effort 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.
The filing did not detail the stake CPFL will have in Grupo Rede. The agreement is subject to authorization from regulator Aneel and approval by Brazil's Economic Defense Council (CADES), as well as Grupo Rede's creditors.
Equatorial in September agreed to acquire Celpa, the only Rede Energia unit the regulator had not seized. Celpa, a power distributor in the northeastern state of Para, was already under bankruptcy restructuring when the regulator seized the other units.