EDF, Houston Industries and AES originally bought a 33.4% stake in Rio de Janeiro power distributor Light, until Reliant sold its shares to the other two as part of its strategy to get rid of tis Latin American investments in 2000. Light has a 30-year concession, 2.7-2.9m customers, 9% of the Brazilian market.
Light also owns 4 hydro power plants (788-MW). (AES-10-K-03-30-1999.rtf)
The sale would have collapsed, and the state retained control, because the private sector bid for less than 45% - but the state-owned bank BNDES Par bought 9.14%.
In 1998 there were widespread power cuts and failures in Light's area of operation. The regulator set strict new quality targets, and the company was required to pay large refunds to customers who had sufferred blackouts.
In 1998, Light also bought the Sao Paulo distribution company Eletropaulo Metropolitana.
"AES agreed in May 1999 to acquire subscription rights, which will allow it to purchase additional shares in Light and Eletropaulo S.A. The additional shares
represent a 3.7% in Light common stock and, after the purchase, AES will own approx. 17.5% of Light's common stock".
EDF: "The impairment tests carried out or updated as of 31 December 2003 resulted in the following depreciation being recognized:
- for Brazilian subsidiary Light, a depreciation of 830 million was allocated to residual consolidated goodwill (296 million) and
tangible assets (534 million). Given the difficult economic environment, macro-economic assumptions and less favourable
outlook, impairment was effectively recognized, but without any going-concern issues for the subsidiary" (EDF AR 2003)