E.ON says Eneva bankruptcy will have ‘no material effect’

Germany’s top utility, E.ON, says the bankruptcy of Brazilian power firm Eneva, which it controls, will have no effect on its underlying net income.

Eneva’s owner Eike Batista has filed for bankruptcy, but the German company has dismissed speculation of the impact on its business.

Eneva, which Mr Batista founded in 2001 as MPX, requested court protection in Rio de Janeiro late on Tuesday after failing to reach an agreement with creditors over $896m of its debt. In a statement E.ON said the filing will have no material effect on its net income.

The Financial Times reports that the judge is expected to rule on the bankruptcy petition within 15 days, and once the request is approved, Eneva will have 60 days to present creditors with a corporate restructuring plan.

E.ON paid almost $500m for a 10 per cent stake in MPX in 2012 as it sought new business following the German government’s move away from nuclear power. The stake promised access to fast-growing electricity demand in Brazil and Chile. However, Batista’s $30bn business empire soon crumbled soon after following the collapse of his oil business.

According to Bloomberg, Eon has so far had to write off least €1bn of the €1.3bn it has invested in Brazil.

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