Reuters: Bankruptcy News: Brazil may intervene in indebted group Rede Energia-sources

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Brazil may intervene in indebted group Rede Energia-sources Aug 31st 2012, 15:36 Fri Aug 31, 2012 11:36am EDT SAO PAULO/BRASILIA Aug 31 (Reuters) - The Brazilian government may intervene in the heavily indebted holding company Grupo Rede Energia SA, which controls several distressed assets in the power distribution market, three sources with knowledge of the action said on Friday. Celpa, a unit of Rede Energia serving the northern state of Pará, is the most prominent business to file for bankruptcy protection in Brazil this year. In its February filing, it cited "a worsening financial and economic situation." In May, the company presented a court in Pará with a restructuring plan that analysts said could force creditors to accept losses and give Celpa more time to pay its debt. Meetings between creditors and the company have been suspended several times. Brazil's energy regulator Aneel has asked the judge overseeing the Celpa proceedings to allow the government to intervene in the company, one of the sources said. Rede Energia holds other assets in northern Brazil that are facing heavy debts and falling revenues. The government is concerned that the bankruptcy of Celpa could jeopardize other companies in the group. (Writing by Reese Ewing; Editing by Leslie Gevirtz)

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