ENEVA Files for Judicial Recovery
OREANDA-NEWS. ENEVA announces it has requested for judicial recovery today, 12/9, 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, which have shown continued improvement in its operational indicators. ENEVA operates seven thermoelectric power plants, and has an annual turnover of over BRL 2 billion and a positive operational cash flow in its previous two quarterly balance sheets. The seven thermoelectric power plants operated by the company were not included in the filing, which include only the holding company, ENEVA S.A., and its subsidiary ENEVA Participacoes 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. The judicial recovery protects the company and its operations from the payment of current liabilities, allowing continuous dialogue with your creditors and the submission of its judicial recovery plan within 60 days, from the date of acceptance of the judicial recovery filing.
All payments relating to debt, totalling BRL 2.33 billion, accumulated by the holding company and ENEVA Participacoes S.A. until the time of the request for judicial recovery, if accepted by the justice, are suspended and shall be resumed only after joint agreement of the company with the creditors and after judicial approval. Salaries and other employee benefits and future payments to suppliers are fully preserved. The operational thermoelectric power plants have sufficient operating cash flow to ensure the continuation of its operations.
Before deciding on the judicial request, the company implemented measures to reinforce its capital structure. In the first stage, in June 2014, the company increased its capital by BRL 175 million, the sale of 50% of the control of Pecem II for BRL 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.
ENEVA obtained important achievements under regulatory framework, as the agreement with Aneel for the maintenance of ParnaЁЄba II contracts and the change in the methodology of calculation of unavailability of their power plants relating mainly to Itaqui and Pecem I, which generated at least BRL 360 million to the company's cash flow. The company's thermoelectric power plants also presented operational improvements throughout the year, totalling 2.4 GW of installed capacity in commercial operation.
Contribution to the electrical system
This year the company completed its construction phase and has become a fully operational company, which generates 2.4 GW in thermoelectric energy for Brazil. ENEVA's gas and coal power plants produce thermal energy at a competitive cost and help to rebalance the stability of the Brazilian energy grid in a critical period of drought, contributing to the energy security of the country regardless of rainfall.
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