January 28 (Renewables Now) - Brazilian renewables developer Renova Energia SA (BVMF:RNEW11) has signed a new BRL-20-million (USD 4.7m/EUR 4.3m) debtor-in-possession (DIP) loan with its parent company Companhia Energetica de Minas Gerais (BVMF:CMIG4), also known as Cemig.
The grant will enable the company to maintain its activities, including its subsidiaries, after filing a Judicial Recovery Plan in December 18, 2019.
With this latest contract, Renova reaches BRL 36.5 million in total loans obtained from Cemig, including BRL 10 million secured on November 25 and BRL 6.5 million on December 27, 2019. The struggling renewables developer also contracted a BRL-5-million advance for future capital increase from Cemig Geracao e Transmissao SA on October 25, 2019.
As announced previously in the document sent to the 2nd Bankruptcy and Judicial Reorganization Court of Sao Paulo, Renova points out its inability to complete the Phase A of the 743-MW Alto Sertao III wind power complex as the main reason behind its crisis. The project currently stays at an 85% completion due to the cash difficulties faced by Renova.
In October, the company filed for bankruptcy as it reported around BRL 3.1 billion in total debt, including BRL 834 million in intercompany debts and BRL 980 million to current shareholders.
(BRL 1 = USD 0.237/EUR 0.216)