(Adds details, quotes from source, context)
By Rodrigo Viga Gaier
RIO DE JANEIRO, Jan 26 (Reuters) - Eletrobras, Brazil’s state-run electricity company, will delay the sale of six power distribution companies it controls in the northern part of the country until 2017, a company source familiar with the decision told Reuters on Tuesday.
The company had planned to sell all the distributors this year, as it looks to get rid of money-losing subsidiaries and focus on areas such as electricity generation.
Centrais Eletricas Brasileiras SA, as Eletrobras is formally known, decided to wait for a planned 5.9 billion reais ($1.44 billion) capital injection from the Brazilian government this year before going ahead with the sales, the source said.
Eletrobras expects to use 3.3 billion reais to pay debt linked to the distributors and 2.6 billion to improve services before the businesses can be offered to potential buyers next year.
“The distributors need to pay debt they have with Eletrobras and they have some mandatory investments to make in 2016 before their privatization can be addressed,” said the source.
The capital injection was included in the federal government budget for this year and confirmed by the Energy Ministry. The source said Eletrobras expects the injection in the first half of the year.
“The (distributors) sale process will last at least a year and these companies cannot stop investing during this period. So it is a lengthy process that will have a conclusion only next year,” said the source.
The utility declined to comment.
Eletrobras shares were off 3.5 percent on the Sao Paulo stock exchange, close to the session’s lows.
Investors want Eletrobras to tighten its structure and focus on core activities.
The company is still expected to sell one power distribution company this year, Celg-D, located in the rich center-west state of Goias. The auction should take place around March.
The source said Eletrobras is also evaluating possible sales of non-controlling stakes in wind generation companies to raise capital for investments. ($1 = 4.08 reais) (Writing by Marcelo Teixeira; Editing by Jeffrey Benkoe)