-- Equatorial Energia's recent acquisition of Brazilian electricity
distributor Celpa began the implementation of its recovery plan.
-- We are affirming our 'D' corporate credit rating on Celpa.
-- We will upgrade Celpa once it emerges from bankruptcy protection or
more disclosure on the execution of its recovery plan is available.
On Dec. 20, 2012, Standard & Poor's Ratings Services affirmed its 'D'
corporate credit rating on Centrais Eletricas Do Para S.A. (Celpa).
The rating on Celpa reflects its judicial reorganization filing since Feb. 28,
2012. The company's recovery plan, which was approved on Sept. 1, 2012,
includes the debt restructuring (debt maturity extension, reduction in
interest expenses) as approved by its creditors. An additional feature of the
recovery plan was the change of the controlling shareholder (Equatorial
Energia acquired 65.18% of Celpa's ordinary shares on November 1) and a
minimum capital contribution of R$700 million through either one or several
installments over two years. Celpa received the first contribution of R$350
million in the second week of December and began paying R$79 million in labor
claims, subject to judicial recovery. The future capital contributions will
depend on the company's cash flow generation.
Celpa has announced that an extraordinary general meeting will be held on Dec.
26, 2012, to discuss and approve an additional capital increase. If
shareholders approve the proposal, Celpa's capital will increase in R$572
million which it will use for debt payment.
Upon its emergence from bankruptcy or more disclosure on the execution of its
recovery plan, we will likely upgrade the company depending on our view of
Celpa's business and financial prospects under its new ownership and capital
structure. We will closely monitor the recovery plan implementation and the
resolution of the extraordinary meeting.
Related Criteria And Research
-- Standard & Poor's Ratings Definitions, May 23, 2012
-- Timeliness of Payments: Grace Periods, Guarantees, And Use Of 'D' And
'SD' Ratings, Dec. 23, 2010
-- Rating Implications Of Exchange Offers And Similar Restructurings,
Update, May 12, 2009
Centrais Eletricas do Para S.A.
Corporate Credit Rating D/--/--
Complete ratings information is available to subscribers of RatingsDirect on
the Global Credit Portal at www.globalcreditportal.com. All ratings affected
by this rating action can be found on Standard & Poor's public Web site at
www.standardandpoors.com. Use the Ratings search box located in the left