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Brazil's Eneva proposes up to 65 pct debt haircut in bankruptcy plan
February 12, 2015 / 9:13 PM / 3 years ago

Brazil's Eneva proposes up to 65 pct debt haircut in bankruptcy plan

SAO PAULO, Feb 12 (Reuters) - Creditors of Eneva SA stand to lose as much as 65 percent of their investment in the Brazilian power producer as part of a bankruptcy protection plan unveiled on Thursday.

Rio de Janeiro-based Eneva, which in December filed for protection from creditors after failing to honor part of 2.33 billion reais ($822 million) in debt, offered a lump sum of 250,000 reais to each unsecured creditor, according to a securities filing.

Creditors who accept the largest discounts will be given top priority when it comes to repayments, the filing said.

The plan, which Eneva’s board approved and was presented to a bankruptcy court in Rio for future discussion, includes a so-called debt haircut between 40 percent and 65 percent of the value of credits. The company declined to elaborate on the specifics of the proposal.

Creditor approval is key to ensure Eneva, which is jointly controlled by Germany’s E.ON SE and former billionaire Eike Batista, stays afloat amid surging energy costs in Latin America’s largest economy. Under terms of the plan, the company will seek a 3 billion reais capital increase through a placement of shares at 0.15 reais each.

The company, formerly MPX Energia SA, filled for bankruptcy protection on Dec. 10, after failing to refinance its debt. Eneva operates several thermal power plants in Brazil with a total installed capacity of 2.9 GW. The company also has interests in gas exploration fields in the country.

$1 = 2.833 Brazilian reais Reporting by Marcelo Teixeira; Editing by Guillermo Parra-Bernal and Tom Brown

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