Eneva to submit recovery plan for court approval with creditor support

By Kali Hays

New York, April 30 – Eneva SA received creditor approval of its judicial recovery plan during a creditors’ general meeting held on Thursday, according to a news release.

The plan will now be submitted for ratification by the Commercial Court of the State of Rio de Janeiro.

In addition, creditors approved Eneva’s sale of its stake in the Pecem, I plant to Energais do Brasil SA.

Eneva’s chief executive officer Alexandre Americano said that both creditor approvals “represent an important step in Eneva’s stabilization plan and will allow the company to resume its growth in a structured and stable way,” according to the release.

As previously reported, the company’s plan is intended to address the capital structure of the holding company and subsidiary Eneva Participacoes through a 40% reduction of total debt.

The company said the plan calls for an increase of capital in cash, capitalization of credits, waiver of unsecured credits and the re-profiling of the remaining debts, which will have longer payment terms and reduced financial costs.

In general, the plan calls for the full payment of up to R$250,000 to each of the unsecured creditors in two installments, without monetary adjustment or interest.

Priority of resource allocation for payment of the more than R$250,000 balance will be given to creditors that grant the greatest individual percentage reduction of credit, according to a prior news release.

Any balance that surpasses this value will be cut by 30% to 65%.

The plan also covers an estimated capital increase of R$3.3 billion, at the price of R$0.15 per share issued by the company.

The subscription to the capital may be made in cash, conversion of debt from creditors or contribution of assets from shareholders, creditors or investors of the company.

Eneva is a Rio de Janeiro-based power generation company.

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