Celpa Readies Debentures for Recovery Plan

Brazilian utility Centrais Eletricas do Para (Celpa) plans to sell BRL650m ($337m) in convertible debentures as part of a bankruptcy recovery plan that also contemplates a 40% haircut on existing debt, it says. The 2027 bonds would come with a 15% coupon, and feature a grace period until December 2015. They would be mandatorily convertible into equity at Celpa’s discretion, though the utility does not give details of the conversion price. A meeting with creditors to discuss the plan is to be held within 120 days. An official at parent Rede Energia declines to offer additional details of the bond sale. The plan also includes Celpa’s obtaining a new BRL200m credit line through the end of 2013. Rede owns 66% of Celpa, and Eletrobras 35%.