Debt, high price threaten Celg-D privatization auction

martes 2 de agosto de 2016 17:58 GYT

By Luciano Costa

SAO PAULO Aug 2 (Reuters) - Investors eyeing Brazil's auction to privatize state-owned utility Celg-D said its heavy debt and the high minimum price could jeopardize the Aug. 19 sale.

Celg-D, which serves the agricultural-rich center-west state of Goiás, is the first power distributor to be sold by Eletrobras, as holding company Centrais Elétricas Brasileiras SA is known. Eletrobras plans to sell all its seven distributors by the end of 2017 as it tries to get rid of money-losing businesses.

The mininum price set for Celg-D is 2.8 billion reais ($859 million). The final price could reach 5.2 billion reais if the company's debt is considered.

Investors said this week that might be too much, even after regulatory changes by Brazil's interim President Michel Temer have improved the sector's outlook.

"Investors are complaining," said one source close to the privatization process who was not authorized to publicly discuss the matter.

Thais Prandini, a director at consultancy Thymos Energy, said credit restrictions during Brazil's sharpest recession in eight decades may also limit interest.

Investors seeking to enter energy distribution in Brazil have other options. Utility Companhia Energética de Minas Gerais , for instance, is looking for a partner in its Rio de Janeiro-based utility Light Energia SA.

Chinese investors again seem to be the best hope.   Continuación...