Enron Buying Control of Brazil’s Elektro

Enron Corp. agreed to pay $1.27 billion for a controlling stake in one of Brazil’s fastest-growing electricity distributors, Elektro, part of the Houston-based company’s aggressive expansion into Latin America. Enron paid nearly double the minimum price for a 47% stake in Elektro at a privatization auction, surprising power-sector analysts who had forecast an average premium of 20%. Elektro, Brazil’s sixth-largest electricity distributor, serves 1.5 million clients in Sao Paulo state, Brazil’s industrial hub. Enron said it will invest $70 million to $90 million annually over the next five years to boost Elektro’s sales and profit. Elektro is the first piece of Brazil’s biggest utility to be sold as part of the South American country’s effort to raise cash and promote investment in its power industry. Proceeds from the sale will be used to pay down part of the utility’s debt.