UPDATE 1-Brazil's Eletrobras to defer sale of 6 power distributors to 2017
(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. Continuación...