IFC to convert debt into CPFL Energia shares

The International Finance Corporation ( IFC) will convert into shares part of a US$40mn debt it is owed by Brazilian power group CPFL Energia (NYSE: CPL), CPFL said in a statement. IFC will write off US$25.3mn of the debt in exchange for a 0.32% voting right stake in CPFL, thereby increasing its percentage of free-floating shares to 15.92% from 15.65%, the company said. If the IFC decides to convert into shares the remaining part of the loan, its stake in the company would rise to 1.26%, and the free float to 16.7%, the company said. The loan agreement was signed in June 2003. The conversion of the shares will occur by May 6, the statement said. CPFL has recently listed its shares in the Novo Mercado at the São Paulo stock exchange Bovespa, the highest corporate governance level, which determines companies to have a free float of at least 25% of voting right stock.