Justice of Rio de Janeiro accepts Light’s request for judicial recovery – 05/15/2023 – Market

The Justice of Rio de Janeiro accepted, this Monday (15), the request for judicial recovery of the holding company Light, according to a document seen by Reuters.

The Light group filed for judicial recovery (RJ) at the 3rd Corporate Court of the State of Rio de Janeiro on Friday (12), claiming the need to seek a solution for debts of around R$ 11 billion.

The debts are concentrated in the energy distributor of the same name, but the request was presented by the holding company to circumvent legal limitations. Power distributors are prohibited by law from entering RJ.

This Monday, B3, operator of the São Paulo Stock Exchange, must exclude the share of Light SA, owner of the energy distributor Light, from all its indices, after the company filed for judicial recovery.

The exclusion of the nine indices of which it is a part will take place at the end of the trading session, according to the methodologies of the indices, B3 said. Light’s participation in these indices “will be proportionally redistributed to the other portfolio members with the relevant adjustment in the reducers”.

Light serves 4.5 million consumers in more than 30 municipalities in Rio de Janeiro. However, 20% of its coverage area is in areas dominated by drug trafficking and armed militia control, and it is also among those that lose the most revenue from energy theft.

The company’s situation, according to some specialists, is aggravated by the delay of regulatory bodies in taking important decisions.

Debt negotiation, for example, is hampered by the delay in defining the rules that will govern the next round of renewal for the service concession of distributors, a task that falls to the MME (Ministry of Mines and Energy).

According to the schedule, 20 energy distribution concessions will expire between 2025 and 2031. Light is the second in line, in 2024. Companies need an early signal, however, the MME has not yet defined the rules.

Some experts saw RJ’s request as an attempt to put pressure on the government to speed up the discussion on renewing the concession in the case of Light.

There is a signal from the folder that the announcement of the measures could this week, with the installation of a public hearing on the subject.

With Reuters