SAO PAULO, Brazil, Oct. 09, 2000 (Global News)Cesp Paraná, state-owned company in charge of producing more than 50% of the electric power in the state of Sao Paulo, will be auctioned December 6 at a minimum price of $1.7 billion reais.
This is the last power generation company owned by the Brazilian state. The winning bidder is to assume a US $4.4-billion debt.
In order to guarantee the settlement of debts, the state will create some warranty mechanisms. One of them allows to recover the Júpia and Ilha Solteira power plants, which generate over 70% of Cesp’s generation capacity, in case the debt is not settled.
A further mechanism is to provide a bank guarantee and pledged securities. There are at least nine groups that have shown an interest in the sale of Cesp, and 8 of them are from abroad. Some of these groups have already participated in electric power tenders.
©2000 The Global News