UPDATE 1-Brazil's Eletrobras to raise up to 5 bln reais with Celg sale

miércoles 21 de octubre de 2015 13:06 GYT

(Adds source's comments, context, power sector expert's opinion)

By Rodrigo Viga Gaier

RIO DE JANEIRO Oct 21 (Reuters) - Brazil's state-run utility Eletrobras expects to raise up to 5 billion reais ($1.26 billion) with the sale of its stake in regional distribution company Celg Distribuição (Celg D), a source familiar with the negotiations said on Wednesday.

Centrais Eletricas Brasileiras SA, as the company is known, has said it plans to sell stakes in several power distribution units and Celg D is considered a prized asset among them due to its location in the agriculturally rich center-west state of Goias.

"I believe this deal will bring between 3 billion and 5 billion reais (to Eletrobras). Eletrobras estimated that amount considering the net present value of Celg's future cash flow," said the source, who asked not to be named.

Eletrobras holds 51 percent of Celg D, while the state of Goias owns the remaining 49 percent. The power distributor has about 2 billion reais ($506 million) in debt.

Celg D serves a total population of 6.6 million people in the state, and also provides electricity for many food processing companies and irrigation projects.

The source said the estimate takes into consideration Brazil's current economic downturn and tighter credit conditions, which could impact investors' appetite.

Eletrobras declined to comment.   Continuación...