An agreement is expected to be reached within 30 days; the company has a debt of more than R$11 billion, of which R$7 billion is in the hands of individuals and managers
The board of directors of Light approved in the meeting of Monday 4 a plan which, if approved by the creditors, could lead to the suspension of the judicial recovery procedure, he considered Estadão/Broadcast. Light’s debt amounts to more than 11 billion reals, of which 7 billion represented by bonds, i.e. in the hands of individuals and managers.
Negotiations with creditors are already underway, according to the sources, and the expectation is that an agreement will be reached within 30 days. This development is one reflection of investor Nelson Tanure’s arrival at Light. The proposal was voted on by a new board, elected in July, after Tanure achieved a 30.5% stake in the company.
According to a source, Tanure would have insisted on this plan, despite opinions to the contrary, as she would like to take the initiative with the Ministry of Mines and Energy and the National Electricity Agency (Aneel) as part of a strategy aimed at obtaining the renewal of the distributor’s concession.
The current contract only expires in 2026, but the company’s intention is to bring this renewal forward, but to do so it is necessary to demonstrate a balanced economic and financial situation, i.e. have a plan approved with the creditors.
In general terms, the agreement would remove from the table one of the main problems for the managers of the funds that have assigned these bonds and bonds, namely the possibility of cutting the debt, as normally happens in judicial recovery processes. Instead, it offers creditors to swap between 30% and 40% of debts for shares, according to an informed source. The rest, adds the source, would be extended by ten years.
There is also a proposal to inject a minimum of R$1 billion of new resources into Light, which, according to the source, should approach R$1.5 billion and R$2 billion.
Bondholders and bondholders, holders of debt securities issued abroad by the company, had already indicated that they seek negotiations as if Light Distribuidora and Light Geradora, against which they have claims, were not included in the judicial reorganization.
The judicial recovery request was made by the Light holding company, which is guarantor of the debts, and the effects – essentially the protection against foreclosures – were extended to the Generator and Distributor. “We want to receive what we have invested and for Light to continue operating. For this we need everyone to negotiate,” said a manager who owns Light’s bonds.
According to her, it was difficult to understand why the directors made this decision. “We understand that what was done was a terrible governance subterfuge for the company itself,” she added. The source also specified that creditors do not accept debt cuts, but could negotiate an extension.
Source: Terra
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