SAO PAULO, Dec 9 (Reuters) - Eneva SA, the ailing Brazilian producer controlled by Germany’s E.ON SE, filed late on Tuesday for credit protection in a Rio de Janeiro court after failing to refinance part of its 2.33 billion reais ($900 million) in outstanding debt.
In a statement, the Rio de Janeiro-based company said the bankruptcy protection petition will allow it to preserve cash and continue its operations. Banks, which were the biggest chunk of Eneva’s creditors, refused to renew an accord to refinance the company’s debt after expiring Nov. 21, the statement noted.
Eneva will replace Chief Executive Officer Fabio Bicudo with Alexandre Americano, according to a separate statement, adding that three board members stepped down in the wake of the bankruptcy petition.
Efforts by Bicudo, a former Goldman Sachs Group Inc dealmaker, to revamp the firm’s capital structure proved insufficient to reduce Eneva’s onerous debt burden. In June, the company raised 175 million reais in fresh capital, sold control of the Pecem II project to E.ON for 408 million reais and sought a loan for the project.
Bicudo was asked to become Eneva’s chairman, the company said.
E.ON gained control of Eneva, formerly MPX Energia SA, last year after the commodities, energy and logistics empire controlled by the company’s founder, Brazilian tycoon Eike Batista, collapsed. The bankruptcy protection plan allows a company to suspend debt payments to creditors and present a revamped business plan within 60 days.
E.ON changed MPX’s name to Eneva last year and hired Bicudo to turn around the company through a thorough cost-cutting program. Under Bicudo’s tenure, Eneva boosted power production to the equivalent of 2.4 gigawatts, earning around 2 billion reais in revenue over the past 12 months.
According to the statement, Eneva operates seven thermal electricity plants that were not included in the petition. The request for bankruptcy protection encompasses the holding company and its Eneva Particpações SA unit.
Some of Batista’s main companies, including oil producer OGX Petróleo e Gás Participações SA, also sought court protection from creditors. OGX, which since a bankruptcy protection petition in November last year changed its name to Óleo e Gás Participações SA, filed the largest-ever bankruptcy plan in Latin America.
Shares of Eneva shed 2.7 percent on Tuesday to 0.71 reais. The stock is down 75 percent this year. (Reporting by Guillermo Parra-Bernal; Editing by Bernard Orr)