247 – Light SA, the Brazilian power distributor under court-supervised restructuring since May 2023, is conditioning a R$12 billion ($2.1 billion) investment plan in Rio de Janeiro on the renewal of its operating license. The company faces more than R$11 billion in debt and is negotiating with the national regulator Aneel to extend its concession, according to an interview with InvestNews.
Mayors from 31 municipalities in Rio signed a petition urging Aneel to expedite its review of Light’s license, highlighting the political backing behind the effort. Investors are also watching closely: the company’s largest shareholder is Samambaia fund, led by banker and former lawmaker Ronaldo Cezar Coelho, with a 20% stake. Other major stakeholders include WNT, linked to Nelson Tanure, with 18.9%, BTG Pactual SA (BPAC11) with 14.8%, and Banco Santander SA (SANB11) with 10.2%.
“I led the privatization of Light. I bought those shares at R$20 from Cemig and at R$23 from BNDES. Things unfolded as they did, but I’m here thinking five years ahead,” Coelho said. He added that relations with Aneel “have never been better,” and predicted the company would exit court restructuring soon.
Light has long struggled with power theft, with its 2024 balance sheet showing about 35% of customers tapping illegal connections. Coelho expects new license terms to include mechanisms to reduce these losses, particularly in relation to ICMS taxes charged on stolen energy.
Part of the planned investment will be funded through incentivized debentures, aimed at upgrading Light’s aging power grid. “The company operates in areas that will require a major overhaul of equipment over the next five years,” a person familiar with the matter told InvestNews.
The utility’s court restructuring was made possible after then-CEO Octavio Lopes filed through the holding company Light SA, sidestepping restrictions that bar distributors from such proceedings. The move culminated in a creditor agreement in April 2024. “When he saw the ICMS tax law change, it became clear the company’s cash would drain. It was a death sentence for the company,” Coelho said.
Coelho also envisions opportunities beyond the electricity business, such as monetizing one of Brazil’s largest private Atlantic Forest reserves through carbon credits, and potentially leveraging consumer data for financial services. “We are pulling a truck out of a ditch. Once it is back on the road with the new license, Light will be in a new phase of Brazil’s economy, ready to explore artificial intelligence and payments,” he said.
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