Light presents a new proposal to creditors, with the conversion of 40% of debts into shares

The proposal goes hand in hand with the intention of the company’s largest shareholder, Nelson Tanure, to inject R$1 billion

Rio, 12/26/2023 – A Light presented creditors with a new proposal to repay the company’s debts, which reach 11 billion reais. The plan involves the conversion of 40% of each creditor’s debts into shares and eliminates the complex judicial recovery presented in July, which was widely rejected by creditors of different profiles.

For those who join the conversion proposal, the rest of the debts, 60%, would be paid over a period of eight years and with a remuneration equivalent to the change in the IPCA plus 4% per year, sources close to the negotiations say. The conversion price will be based on the average of the prices for the last 45 days, they added.

For those who do not participate in the conversion, the payment period would be 15 years, with remuneration of the IPCA increased by 2% per year.

The proposal occurs parallel to the entrepreneur’s intention Nelson Tanure – whose asset WNT is the largest individual shareholder of the electricity company, with 30.05% – to make an injection of R$ 1 billion into the company, as reported by Station/Broadcast. Tanure recently contacted creditors’ representatives and informally pitched the idea.

Light’s new payment plan has found more favor among small creditors. One reason is the fact that it increases the amount that the company proposes to pay in full and in cash from R$10,000 to R$20,000, according to the sources. By increasing the cap, the company is able to cover a larger share of investors who purchased Light bonds.

For one negotiator interviewed by Broadcast, the new format is not yet ideal, but it opens the way for negotiations, which was impossible with the plan presented in July.

However, the proposed conversion has not been welcomed by bank negotiators, according to sources who spoke on condition of anonymity. “The problem is that, in their view, the proposal for those who do not convert must be very bad to force conversion, which is not attractive on its own. This creates a dead end,” said a person close to the negotiations. “Ideally, the two proposals would be reasonable in isolation to appeal to those who have this appetite and not force those who don’t.”

By preparing a proposal that is more likely to satisfy small creditors, Light could assemble a negotiating bloc and gain bargaining power with the banks. The holders of bonds, of different profiles – private individuals and investment funds – amount to 7 billion reais.

The power company’s universe of creditors includes more than 40,000 individual investors, 250 investment funds and ten domestic and foreign financial institutions, according to the company. The company’s exposure to banks amounts to approximately 8% of total debt.

Source: Terra

Rose

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