Laep-Led Group May Bid For Brazil Power Firm Celpa
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A group of Brazilian and foreign investors led by buyout firm Laep Investments may bid for Brazilian power distributor Celpa, betting that a bold turnaround could save the debt-laden company from near-bankruptcy. Laep, a private equity firm that invests mainly in distressed companies, may team up with two energy funds from the United States and one from Canada to bid for Celpa, Luiz Cezar Fernandes, chief executive for São Paulo-based Laep, told Reuters. He declined to elaborate on potential terms. Celpa, a unit of power holding company Rede Energia serving the northern state of Pará, filed for bankruptcy protection in February, citing "a worsening financial and economic situation." On May 7, the company will present a debt restructuring plan to a court in that state that analysts say could force creditors to accept losses and give Celpa more time to pay its debt. The Laep-led group would be in a position to offer more for Celpa assets than other potential bidders, facilitating an accord between creditors and Jorge Queiroz Jr., Rede Energia's controlling shareholder, Fernandes said. In April, Rede pledged to reach out to creditors to seek an out-of-court restructuring. The lack of firm bids is preventing Queiroz, also Rede Energia's chairman, from selling part or all of its 54 percent stake. In recent weeks, the government decided against bailing out Celpa, sparking a tumble in its bonds. Queiroz's stake in Rede, whose debt almost tripled to $3.4 billion over the past five years, is valued at $600 million by some analysts. The restructuring plan seeks to help Rede Energia prevent cross-default clauses from hampering the group in the event of a Celpa default. Lack of support from bond and shareholders could drag on Rede Energia's finances, analysts said. Read more.