Impsa’s Wind Power Energy Declared in Bankruptcy by Brazil Judge

Aug 04, 2014 7:58 pm ET

Aug. 4 (Bloomberg) -- The most profitable unit of Industrias Metalurgicas Pescarmona SA, the Argentine wind power company that delayed its June debt service for a week, was declared bankrupt by a judge in Brazil.

Pernambuco state judge Rafael Jose de Menezes declared Wind Power Energy in bankruptcy in response to requests from two creditors, Libra Terminal Valongo SA and Libra Terminais SA, which said the company hadn’t paid debts of 10.6 million reais ($4.7 million), according to a July 30 ruling on the court’s website.

Impsa officials didn’t reply to several calls and e-mails seeking comment today.

“I certainly declared the company in bankruptcy because they refused to pay,” Menezes said today in a telephone interview from Recife, Pernambuco state. “They have now 15 days to appeal this ruling to the Justice Tribunal. If they don’t, the bankruptcy process will continue.”

Judge Menezes appointed Jose Azevedo Neto to oversee the bankruptcy process. The company will have to identify all of creditors and the full amount owed.

Mendoza, Argentina-based Impsa said earlier this year it’s seeking to sell assets to cut debt. The company, which has 330 megawatts of wind farms in operation in Brazil and 480 megawatts under construction, is the third-biggest producer of wind energy in Brazil with a market share of 6.4 percent, according to Bloomberg New Energy Finance. Wind turbines account for 90 percent of its revenue.

Bond Slump

Impsa was a week late on a debt service payment in Argentina in June. It said the payment was delayed “for administrative reasons” in a filing with the Buenos Aires stock exchange. That prompted Fitch to downgrade the company to CCC, eight levels below investment grade, from B+, the highest non- investment-grade rating.

“The downgrade reflects the company’s stretched liquidity,” the rating company said at the time.

The price of Impsa’s $390 million of 10.375 percent notes issued by WPEI due 2020 fell to 45 cents on the dollar yesterday from 65 cents at the end of last year. Impsa has $1.24 billion in debt, the company said on June 30.