July 16, 2018 / 11:58 AM / 3 months ago

Eletronuclear head says may not honor Angra three debts: paper

SAO PAULO (Reuters) - Nuclear energy firm Eletrobras Termonuclear SA will not be able to honor debts related to the controversial Angra 3 nuclear project if the loans are not renegotiated by the beginning of August, the company’s head said in an interview published Monday.

Talking to Brazil’s Valor Economico, chief executive Leonam Guimarães said Eletronuclear, as the company is commonly known, will not have the cash to pay debts coming due next month to state banks Caixa Economica Federal and BNDES, as well as Centrais Eletricas Brasileiras SA, the firm’s parent.

Together, he said, the monthly loan payments come to 80 million reais ($20.8 million).

“Adding up the three monthly payments we get to 80 million reais, which puts an enormous weight on our monthly revenue of 270 million reais,” Guimarães told Valor. “That makes administering the operations of the other plants inviable.”

A potential default would be just the latest hurdle for Angra 3, construction of which was halted in 2015 amid allegations of corruption. While Eletronuclear has already invested some 5 billion reais in the project, it has struggled to attract the investors needed to restart the project.

Eletronuclear, Caixa, BNDES, and Eletrobras, as Centrais Eletricas Brasileiras is commonly known, did not immediately respond to requests for comment on Monday morning.

Guimarães added that Eletronuclear is working on various fronts to resolve the debt issue, such as modifying the grace period on the Caixa loans.

Reporting by Gram Slattery; Additional reporting by Luciano Costa; Editing by Chizu Nomiyama

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