Rio Power Utility Light Nears Judicial Recovery Exit After $296 Million Capital Raise
Brazil · Energy
Key Facts
—Capital increase completed Light finalized a R$1.5 billion (about US$296 million) share subscription on 8 July 2026, satisfying the final condition of its court-approved restructuring plan.
—Backers and dilution Reference shareholders BTG Pactual, Ronaldo Cezar Coelho, and Carlos Alberto Sicupira anchored the raise, while non-participating investors face share dilution.
—Debt conversion unlocked The successful cash injection triggers a planned R$2.2 billion (about US$434 million) debt-to-equity swap, projected to cut net debt from roughly R$9 billion (about US$1.8 billion) to under R$6 billion (about US$1.2 billion).
—Creditor recovery terms Small creditors receive full repayment, while larger creditors can swap up to 40% of debt for shares with the remainder paid over 8 to 12 years.
—Rio investment pipeline Exiting judicial recovery frees Light to execute a planned R$10 billion (about US$2.0 billion) to R$12 billion (about US$2.4 billion) investment package focused on grid modernization and loss reduction.
Rio de Janeiro’s power distributor Light exits judicial recovery after finalizing a R$1.5 billion (about US$296 million) capital increase, clearing the way to convert billions in debt and resume critical infrastructure investments.
The R$296 Million Capital Injection
Light S.A. (B3: LIGT3) completed a capital increase of R$1.5 billion (about US$296 million) in July 2026, fully subscribing the maximum number of shares approved by its board. The private subscription saw 238,473,768 new common shares issued at R$6.29 per share, with investors also receiving two subscription warrants per share, which Brazil Journal calculated brought the effective offer price down to about R$2.10.
The operation was anchored largely by three reference shareholders. BTG Pactual, holding about 15% of the company, investor Ronaldo Cezar Coelho with approximately 20%, and billionaire Carlos Alberto “Beto” Sicupira of 3G Capital, holding around 10%, collectively provided roughly R$870 million (about US$172 million) of the first-phase R$1.24 billion (about US$244 million) raised.
Existing shareholders had preemptive rights to participate and avoid dilution.
Exiting Court-Supervised Restructuring
The capital raise represents the final major hurdle in Light’s judicial recovery process, known in Brazil as recuperação judicial. The holding company originally filed for restructuring in May 2023 with roughly R$11 billion (about US$2.2 billion) in debt.
A creditors’ assembly approved the restructuring plan in May 2024, and the Rio de Janeiro Court of Justice homologated it in June 2024.
With the first phase raising R$1.24 billion (about US$244 million), surpassing the R$1 billion (about US$197 million) minimum required by the plan, company executives confirmed the condition to exit judicial supervision was met. CEO Alexandre Nogueira signaled the company intends to return to credit markets later in 2026, potentially issuing new debentures once the exit is formally concluded.
Debt Swap and a Cleaner Balance Sheet
Fulfilling the cash injection triggers a second pillar of the restructuring: the conversion of up to R$2.2 billion (about US$434 million) of creditor debt into equity through convertible debentures. This debt-to-equity swap is designed to materially deleverage the power company, which entered judicial recovery with significant financial liabilities.
Brazil Journal reported that the combined cash injection and debt conversion would slash net debt from approximately R$9 billion (about US$1.8 billion) to under R$6 billion (about US$1.2 billion). This deleveraging would bring Light’s leverage ratio, expressed as Net Debt over EBITDA, below 3x, a level that compares favorably to Brazil’s listed power distributors.
What the Deal Means for Creditors
The judicial recovery plan offers differentiated treatment to secure broad support. Small creditors with claims up to R$30,000 are set to receive full payment within 90 days of the plan’s court homologation, ensuring a swift resolution for the most vulnerable stakeholders.
For larger financial creditors, the plan provides an option to convert up to 40% of their debt into shares, with the remaining 60% repaid over 8 years indexed to inflation (IPCA) plus 4% annual interest. Creditors who opt out of the conversion receive full payment extended over 12 years at IPCA plus 2% interest, avoiding severe haircuts typical in such restructurings.
Why This Matters for Rio de Janeiro
For residents and investors, Light’s financial stabilization is critical for service reliability. The restructuring and a linked concession renewal unlock a pipeline of R$10 billion (about US$2.0 billion) to R$12 billion (about US$2.4 billion) in investments over the coming five years to modernize distribution lines and combat rampant commercial losses from energy theft.
A financially stronger Light, with leverage projected lower than its peers, reduces credit risk for debenture holders and supports continuity of electricity supply across more than 30 municipalities in Rio de Janeiro state. The company can now redirect cash previously consumed by debt service toward tangible grid improvements.
Frequently Asked Questions
What is a judicial recovery exit?
An exit from recuperação judicial means a company has satisfied all conditions of its court-approved restructuring plan, regaining full control of its finances and exiting court supervision to operate as a normal private entity.
Who backed Light’s R$1.5 billion (about US$296 million) capital increase?
The capital injection was anchored by reference shareholders BTG Pactual, Ronaldo Cezar Coelho, and Carlos Alberto “Beto” Sicupira, who collectively contributed most of the first-phase funds alongside free-float and retail investors.
How does the debt conversion impact Light’s leverage?
By converting R$2.2 billion (about US$434 million) of debt into equity, Light’s net debt is expected to drop from around R$9 billion (about US$1.8 billion) to less than R$6 billion (about US$1.2 billion), reducing its leverage ratio to below 3x Net Debt/EBITDA.
Sources: Brazil Journal: Light capta R$ 1,24 bi em aumento de capital e vai deixar RJ, Agência Brasil: Justiça homologa recuperação judicial do grupo Light, Radar Energia: Light capitaliza R$ 1,5 bilhão e reforça balanço para investimentos, CNN Brasil: Light anuncia captação de R$ 1,2 bi para aumento de capital, Ativo Virtual: Light (LIGT3) aprova aumento de capital de até R$ 1,5 bilhão
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