BNDES to meet with AES over $1.2bn debt

24 June 2003 – Brazil’s development bank, BNDES, has scheduled a new meeting with AES Corp. Thursday to discuss the US power group’s $1.2bn debt with the federally controlled bank.

BNDES’s Finance Director Roberto Timotheo da Costa said Monday the parties will continue to discuss debt-rescheduling proposals. The director said AES’s board is meeting Tuesday in the U.S. and is expected to discuss issues involving the power group’s defaulted payments to BNDES.

The bank last week said it posted a loss of 1.06bn reals ($1=BRL2.893) in the four months to April this year as provisions for defaulted loan payments by AES weighed on the bank’s bottom line.

The loss results from provisions of BRL686m the bank had to make because of AES defaults on loan payments.

In 1998, AES took out a $1.2bn in loans to buy local electricity distributor Eletropaulo Metropolitana but has defaulted on several payments this year.

AES and BNDES have been trying since January to come to an agreement on a debt-rescheduling plan, but so far AES hasn’t offered any payment on nearly $750m in overdue debt.

The latest AES proposal, presented last Wednesday in a meeting, wasn’t considered acceptable, according to BNDES officials.