Eletropaulo prepares US$563mn local debt issue

Brazilian distributor AES Eletropaulo has filed with securities watchdog CVM for permission to issue as much as 1.5bn reais (US$563mn) in debt locally, the company said in a statement to the São Paulo stock exchange. Eletropaulo, which is controlled by US power company AES (NYSE: AES), plans to issue the debt over two years after receiving CVM approval. The company will say how it intends to use the proceeds when it decides to issue the first tranche, a spokesperson told BNamericas. Eletropaulo said recently that it did not need to issue new debt since it has just concluded a lengthy renegotiation of more than US$3bn in debt. Company officials have said that the renegotiated payments would be covered by cash flow. Officials did, however, say Eletropaulo would tap financial markets if conditions offered allowed for a reduction in financial costs or an increase in maturities. The company recently announced an investment program of 428mn reais for 2005, up from 272mn reais last year. Eletropaulo sells power in São Paulo city and 23 towns in the metropolitan region.