Centrais Eletricas Brasileiras SA recently announced that it is expecting to receive a 29-year old debt amount worth 2.23 billion reais or $566 million from AES Corp (NYSE:AES)’s Eletropaulo Metropolitana SA. This is approximately one-third more than the amount that Eletropaulo should be paying as per the court’s orders.
A cost higher than expected
The Brazil-based company is popularly called Eletrobras. The amount it is expecting from Eletropaulo, which is headed by the U.S. based AES Corp, is higher than 1.7 billion reais, which it was ordered to pay by the court. On Thursday, a consultant appointed by the court had ordered Eletropaulo to pay the aforementioned amount to the firm in relation to the debt which is 29-years old.
Eletrobras, in the meanwhile, said that their estimate regarding the debt is rooting from the report presented by the consultant from court. The debt amounting 2.23 billion debt (the actual amount) does not, at present, include the fee of lawyers as well the court. The latter amounted to 348 million reais. The total amount, as calculated by Brazil’s Eletrobras is almost 1/3rd higher than what the court has ordered Centrais Eletricas Brasileiras SA to re-pay.
Background of the debt
Eletropaulo borrowed this debt from Centrais Eletricas Brasileiras SA through a contract back in 1986. This debt was taken by the latter almost 10 years before AES Corp actually acquired the firm from the Sao Paulo state Government. Since 1989, Eletrobras has been making efforts to get this debt back.
Meanwhile, Eletropaulo claims that it does not owe anything to Eletrobras, for which it has also been struggling with the latter’s attempts of debt collection in a court at Rio de Janeiro. Before Eletropaulo was sold to AES Corp (NYSE:AES) by Sao Paulo, its transmission unit was segregated from the parent company.
No official from Eletropaulo was available to comment on the issue when contacted by Reuters.
