Brazil's Eneva notified of loan default
SAO PAULO Dec 8 (Reuters) - Eneva SA, the Brazilian power generator led by Germany's E.ON, said on Monday it had been notified by Credit Suisse Brazil for defaulting on loan payments contracted on April 11, 2011 and June 22, 2011.
Eneva, which was known as MPX Energia SA when Brazilian tycoon Eike Batista controlled it, said in a securities filing that payment dates for $9.4 million related to principal and interest had expired on Friday.
Power companies in Brazil are being squeezed by the worst drought in 80 years, driving electricity prices sky high as the country turns on more expensive fossil-fuel-fired power plants to replace water-generated power.
Eneva has been particularly hard hit because of delays in building and licensing its coal and natural-gas power plants, forcing it to buy power on the spot market to meet the contractual obligations of the unfinished plants while selling the power at a lower contracted price.
Eneva is in discussion with creditors to suspend principal and interest payments on debt owed by its subsidiaries and advance a stabilization plan, the company said. (Reporting by Anna Flavia Rochas; Writing by Caroline Stauffer and Jeb Blount Editing by W Simon)
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