UPDATE 1-Brazil utility Eneva to undergo $679 million capital increase
(Wraps Germany and Brazil stories; adds details on transaction, executive quotes, share reaction; changes dateline)
By Asher Levine and Christoph Steitz
SAO PAULO/FRANKFURT May 12 (Reuters) - Brazilian electric utility Eneva SA will increase its capital by up to 1.5 billion reais ($678.7 million), according to a securities filing on Monday, as part of its effort to reduce a heavy debt load.
Eneva, formerly known as MPX Energia SA, is controlled by E.ON SE, Germany's largest utility, and Brazilian investor Eike Batista.
The first phase of the transaction will involve a capital increase of up to 316.5 million reais, the filing said. E.ON will buy up to 120 million reais worth of new Eneva shares priced at 1.27 reais each.
The second phase includes a capital increase of up to 1.5 billion reais, minus the amount raised in the first phase, at a share price that has yet to be determined. In that round, E.ON will buy up to 450 million reais of new shares, the filing said.
Eneva will also start looking for buyers for between 50 percent and 100 percent of its Pecem II thermoelectric plant, the filing said. Should no buyer come forward, E.ON will purchase the plant and contribute that amount back into the capital increase.
Local banks that provide financing to Eneva will also give the company a $100 million reais bridge loan, the filing added.
Shares of Eneva jumped nearly 15 percent in afternoon trading in Sao Paulo, while E.ON was up about 1 percent in Frankfurt. Continuación...