Eletropaulo To Get BRL450 Million Profit Boost From Telecom Sale

Date : 07/08/2011 @ 9:36AM
Source : Dow Jones News
Stock : Tim Participacoes S.A. American Depositary Shares (Each Representing 5 ) (TSU)
Quote : 18.89  0.0 (0.00%) @ 8:30AM

Eletropaulo To Get BRL450 Million Profit Boost From Telecom Sale

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Eletropaulo (ELPL4.BR) said Friday that the sale of telecommunications units in Brazil owned by its parent company should boost net income by 450 million Brazilian reais ($289 million).

The sale of two telecom companies owned by Cia Brasiliana de Energia, controlled by Eletropaulo parent AES Corp. (AES), should result in a payment to Eletropaulo this year should the deal be completed by the fourth quarter. The total boost in net income includes BRL308 million that the company received last year as part of a deal between Eletropaulo and Brasiliana to sell the telecom companies, Eletropaulo said in a Brazilian regulatory filing.

Brasiliana sold Eletropaulo Telecomunicacoes Ltda. and AES Communications Rio de Janeiro SA to Tim Participacoes (TCSL4.BR), the Brazilian mobile-phone unit of Telecom Italia SpA (TI, TIA, TIT.MI). The companies will be sold for BRL1.6 billion, Eletropaulo said.

Eletropaulo shares surged in recent days on speculation national development bank BNDES would sell its 49.9% stake in Brasiliana.

BNDES took a stake in Brasiliana as a conversion of half of a $1.2-billion loan taken out by AES to buy Eletropaulo in 1998, which was never repaid. AES agreed to exchange $600 million into shares of Brasiliana, in which AES currently holds a stake of 50% plus one share, and to repay the other half.

AES has the right of first refusal to buy the BNDES shares, and Britaldo Soares, president of AES Brazil, has said the company is interested in buying the stake, according to reports.

-By Paulo Winterstein, Dow Jones Newswires; 55-11-3544-7073; paulo.winterstein@dowjones.com

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