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To: SJS who wrote (4873)	8/10/1999 3:26:00 PM
From: MangoBoy	Respond to of 6846

[AES buys data transmission network in Brazil] SAO PAULO, Aug 10 (Reuters) - U.S. energy firm AES Corp (NYSE:AES) on Tuesday snapped up a controlling stake in Brazilian data-transmission company Eletronet, widening its holdings in Latin America's largest country, where it is already a leading power supplier. Paying 290 million reais ($158 million), AES bought 51 percent of Eletronet, which has a 26,100 miles (42,000 km) fiber optic telecommunications network spanning the entire country. Arlington,Va.-based AES was the sole bidder for the Eletronet, paying the base price set by state power company Eletrobras in an auction at the Rio de Janeiro stock exchange. Light Participacoes (Lightpar) (SAO:LIPR3), a unit of Eletrobras, will hold the remaining stake in Eletronet. AES said it plans to invest a total of 500 million reais ($278 million) in Eletronet projects over the next four years. Since 1996, AES has invested 3.2 billion reais ($1.8 billion) in Brazilian power companies and now owns stakes in the firms supplying electricity in Brazil's three largest cities: Sao Paulo, Rio de Janeiro and Belo Horizonte. "The purchase of Eletronet offers a great synergy among the other companies we have already bought in Brazil," Luiz David Travesso, president of AES' local unit AES Brasil said after the auction. "The purchase is a new venture for AES, and it complements the company's existing business in Brazil," said Felipe Leal, utilities analyst at Banco Santander in New York. The Eletronet sale was the government's third major privatization his year, following U.S.-based Duke Energy Corp.'s $668 million purchase for a Sao Paulo state generating company, Paranapanema in July, and the $992 million purchase in April of natural gas company Comgas by Britain's BG Plc and Royal Dutch Shell. After free market-minded President Fernando Hernique Cardoso took office in 1995, the government speeded up its state sell-off of everything from roads to ports to electricity distribution companies in a program that peaked with the $19 billion auction of the Telebras phone system in July last year. Global emerging market turmoil threw cold water on the party beginning in August. A shock currency devaluation last January, which plunged Brazil into its first recession since 1992, forced the government to further stall plans. But Sao Paulo's gas utility Comgas' successful sale in April at over double its base offering price revived the privatization program. In Tuesday's Rio de Janeiro auction, AES became the only bidder after three other firms -- Britain's National Grid (ISEL:NGG) and two locals CS Participacoes and Eletropar 2000 dropped out at the last moment. It was not clear why National Grid, considered a strong candidate for Eletronet among utility analysts, failed to put in a bid. But some specialists said the sale did not generate as much interest as other properties Brazil had sold because access to telecommunications networks in major markets was already available. National Grid, together with U.S. Sprint Corp. (NYSE:FON) and France Telecom (SBF:FTE), bought a long-distance telephone concession in Brazil at the beginning of the year. AES has a foothold in Brazil's power market with stakes in Rio de Janeiro's Light Servicos de Eletricidade (SAO:LIGH3) and Sao Paulo's Eletropaulo (SAO:ELPL3). In 1997, AES, together with Southern Electric, a unit of Southern Co. (NYSE:SO) also bought Brazilian electric utility Belo Horizonte-based Cia Energetica de Minas Gerais (Cemig) (SAO:CMIG4). The Eletronet stake, originally put at 50.01 percent, was increased automatically to 51 percent before the sell-off due to Brazilian securities legal requirements bourse officials said. When news of the Eletronet project first filtered out in March, Lightpar shares shot up more than 2,700 percent to 18 reais on speculation it would become a cash machine. Lightpar shares, which were suspended from trading on Tuesday due to the auction, closed 6 reais on Monday or flat compared to its previous finish. In early afternoon trading on the New York Stock Exchange, AES shares were off 13/16 at 54 3/16.