23 January 2003 - AES Transgas is to delay a payment of around $300m due on preferred shares of Sao Paulo distributor Eletropaulo, which it acquired in 2000, according to a statement released to the Sao Paulo stock exchange.

AES Transgas said it is scheduled to make the payment on January 25, as the last of four instalments owed to Brazil's national development bank BNDES and individual investors that sold their preferred shares in January and May 2000, respectively.

The holding company now wants to postpone payment until April 15 due to a "temporary shortage of funds," Eletropaulo said in a statement. AES Transgas will pay interest equivalent to 9 per cent a year for the 80-day delay to those creditors that accept the postponement.

AES Transgas is a holding company used by parent company US-based AES to buy preferred shares in Eletropaulo. It owns 64.1 per cent of Eletropaulo's preferred shares, equivalent to 38.6 per cent of total capital.

AES Transgas was using dividends from Eletropaulo to pay for the shares, but the recent decision by the distributor to suspend dividend payments forced AES Transgas to reschedule its own debt payment, a spokesperson explained.