Bulletin: Favorable Legal Decision To Increase CESP's Financial Flexibility

This report does not constitute a rating action. SAO PAULO (S&P Global Ratings) Dec. 13, 2022--S&P Global Ratings said today that the recent favorable legal ruling will strengthen CESP-Companhia Energetica de Sao Paulo's (CESP; BB-/Stable/--) financial flexibility. The legal decision was in regard to the indemnity amount, which the federal government owes the company for termination of a previous concession. However, we believe that the company might use the proceeds to distribute extraordinary dividends and to finance the investment plan of Auren Energia S.A., CESP?s immediate holding company. CESP opted not to renew the concession for the Três Irmãos power plant under the Law 12,783/2013, which resulted in the uncontested indemnity amount of R$1.7 billion as of March 2014, related

...SAO PAULO (S&P Global Ratings) Dec. 13, 2022--S&P Global Ratings said today that the recent favorable legal ruling will strengthen CESP-Companhia Energetica de Sao Paulo's (CESP; ##- /Stable/--) financial flexibility. The legal decision was in regard to the indemnity amount, which the federal government owes the company for termination of a previous concession. However, we believe that the company might use the proceeds to distribute extraordinary dividends and to finance the investment plan of Auren Energia S.A., CESP's immediate holding company. CESP opted not to renew the concession for the TrOs Irmpos power plant under the Law 12,783/2013, which resulted in the uncontested indemnity amount of R$1.7 billion as of March 2014, related to non-amortized concession investments. According to the company's announcement, CESP will receive the indemnity proceeds in 84 consecutive installments, starting on Oct. 15, 2023, totaling roughly R$4.1 billion, which will be indexed to Brazil's basic interest...

Bulletin