EDP Brasil completed the acquisition of Eneva's stake in Pecém I plant

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EDP – Energias do Brasil, EDP Group’s subsidiary for the Brazilian electricity market, listed in São Paulo Stock Exchange and 51.0% owned by EDP, has announced that it completed the acquisition of 50% of the total and voting capital of Porto do Pecém Geração de Energia S.A. held by Eneva.

The financial closing follows the fulfillment of all conditions preceding the transaction. EDP Brasil paid a total of R$300 million.

Pecém I thermoelectric power plant is located in the municipality of São Gonçalo do Amarante. It generates energy based on mineral coal and has two generators of 360 MW, totaling 720 MW. The thermoelectric power plant began its commercial operation in December 1, 2012.

In the energy auction-5, held in October 2007, the thermoelectric power plant sold 615 average MW, guaranteeing a fixed income and indexed to the IPCA inflation index of about R$467.4 million (dated as of March 2009), for 15 years, starting in 2012.

ENEVA has also announced that it has requested for judicial recovery in the capital district of the State of Rio de Janeiro. The decision aims to preserve adequate cash flow to continue the company’s operations.

ENEVA operates seven thermoelectric power plants, and has an annual turnover of over R$2 billion (US$760.5 million) and a positive operational cash flow in its previous two quarterly balance sheets. The seven thermoelectric power plants were not included in the filing, which include only the holding company, ENEVA S.A., and its subsidiary ENEVA Participações S.A.

The decision to request for judicial recovery is due to the fact that the agreement the company held until November 21st with creditors holding its financial debt was not renewed. Under the expired agreement, the banks agreed to suspend the amortization and the payments of interest of financial transactions of ENEVA.

Before deciding on the judicial request, the company implemented measures to reinforce its capital structure. In the first stage the company increased its capital by R$175 million though the sale of 50% of the control of Pecém II for R$ 420 million to E.ON. The company has implemented a cost reduction program, in course, which includes adjustments in staff, IT services and operating expenses.

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