Light: MPRJ files suit against judicial recovery – 05/17/2023 – Market
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The Public Prosecutor’s Office in Rio de Janeiro filed a lawsuit asking for the suspension of the court decision that authorized this week the judicial recovery of the electricity company Light, according to a document seen by Reuters.
In the action, the MPRJ questions the fact that the recovery of the Light holding provides for the extension of benefits to the group’s energy distributor and generator.
This was the arrangement found by Light to protect its distributor —the focus of the group’s financial problems—, since, by law, concessionaires of public energy services cannot resort to judicial or extrajudicial recovery regimes.
For the MP, Light’s subsidiaries will obtain the bonuses provided for by law without any burden; will achieve benefits without any liability, since, as they are not the parties under reorganization, they are not subject to the possibility of bankruptcy.
“It is not possible to admit such opposition and discrepancy with the most basic norms of ritualistic, along with the serious violation of administrative law in matters of public service, and of private business law”, says the body in the action.
With around BRL 11 billion in debt, Light had its judicial reorganization accepted by the Justice of Rio de Janeiro this week. The request was motivated by a serious financial imbalance of its energy distributor, responsible for serving consumers in more than 30 municipalities in Rio de Janeiro.
However, a group of creditors who hold approximately R$5 billion in Light debentures have questioned the judicial reorganization, claiming that the company used a “fraudulent” thesis.
This group, which comprises more than 30 fund managers, also filed an appeal to suspend the process authorized by the Court.
“It is important to emphasize that Light’s request for judicial recovery causes a feeling of insecurity in market agents, which in turn contributes to a relevant contraction in the offer of credit and an increase in funding costs, which harms future investments in all sectors of the economy”, said the group of managers, in an open letter released this Wednesday (17).
The debenture holders defend a “constructive approach” to resolve the case of Light, a solution that “should prioritize the security of customer service, as well as the fulfillment of financial obligations by the company”, they said.
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