This excerpt taken from the PBR 6-K filed May 13, 2005.
Petrobras seals acquisition of Eletrobolt thermal generator
(Rio de Janeiro, May 12, 2005). PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA], a Brazilian international energy company, announces that it has concluded the process for the acquisition of Sociedade Fluminense de Energia SFE, owner of the Eletrobolt thermoelectric power generating plant located in Seropédica, state of Rio de Janeiro. The power plant has nominal capacity of 388 MW and is one of the three merchant plants with which Petrobras signed Consortium Contracts in 2001 and 2002, which included clauses establishing contingent liabilities for payment of taxes, rates and tariffs, operating costs and maintenance and capacity investments, in the event the plant was unable to generate sufficient revenues to cover these items.
The previously agreed payment structure provided for 30 fixed monthly payments totaling US$159 million and a final US$30 million payment at the end of the seventh year. Petrobras renegotiated the payment terms with the 17 commercial banks at that time the owners of SFE, paying US$65.1 million for the shares in SFE and assuming debt of US$98.9 million.
Concomitant with the acquisition of SFE, Petrobras signed documentation extinguishing the Consortium Contract, relieving it of any obligation to make the contingent payments provided for therein and leaving it free to benefit from any gains from the plant's operations.
The conclusion of these negotiations is part of the Company's strategy for the power sector, which provides for limiting any increase in its thermal generation capacity to the conclusion of projects already being executed or to acquisitions that signify reductions in contingency payments.
Petróleo Brasileiro S.A PETROBRAS
Investor Relations Department
Raul Adalberto de Campos Executive Manager
Av. República do Chile, 65 - 4th floor
20031-912 Rio de Janeiro, RJ
(55-21) 3224-1510 / 9947
This document may contain forecasts that merely reflect the expectations of the Companys management. Such terms as anticipate, believe, expect, forecast, intend, plan, project, seek, should, along with similar or analogous expressions, are used to identify such forecasts. These predictions evidently involve risks and uncertainties, whether foreseen or not by the Company. Therefore, the future results of operations may differ from current expectations, and readers must not base their expectations exclusively on the information presented herein.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: May 12, 2005
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