AES, BNDES deal awaits go-ahead from regulator

The US$1.2bn debt-for-equity agreement between Brazil's national development bank BNDES and US utility AES is waiting for final approval from electricity regulator Aneel before being signed, local press reported BNDES CFO Roberto da Costa as saying. Costa told reporters that BNDES has already asked Aneel officials to speed up their decision. "The time-span for approval of these questions is too long, we are asking for them to speed up their analysis, although we know they are independent," Valor Economico quoted Da Costa as saying. BNDES wants to sign the agreement before year-end to avoid having to provision for AES's unpaid debt whcih would force the bank to post a loss in 2003,newspapers reported. BNDES representatives are also reportedly meeting with AES bondholders to explain the transfer of shares in AES generation subsidiary AES Tiete to the Novacom holding company. Some of Tiete's shares are being used as a guarantee for an AES loan of US$300mn in the US due 2015, the newspaper reported. The final terms of the debt-for-equity agreement, whose deadline was extended to December 22 from December 15, could give the Brazilian bank 53.65% of non-voting stock in Novacom and AES 46.15%. Previous expectations were a 50-50 split. The proportion of voting stock will remain unchanged and AES would still have control of Novacom, Valor Economico reported. The negotiations have been dragging on since the beginning of the year, and foresee the transference of AES's stakes in distributor Eletropaulo and generators AES Tiete and AES Uruguaiana to Novacom. The agreement would see BNDES take its stake in Novacom in return for writing off US$600mn debt. AES will repay US$515mn over a period of 10-12 years, made through convertible debentures guaranteed by the assets of Eletropaulo, Uruguaiana and Tiete. In the event of non-payment, BNDES would trade in the debentures and take control of the company.