The Brazilian firm Equatorial Energia won the first of six electricity distributorships that state-owned Eletrobras, Latin America's largest power utility, intends to sell as part of a broader privatization plan.
Equatorial Energia, the only bidder in the auction held at the Sao Paulo stock exchange, bought Cepisa, the Eletrobras unit in the northeastern state of Piaui, for a symbolic price of 50,000 reais ($13,513).
The acquiring firm was obligated to commit itself to additional capital investments of 720 million reais ($194.5 million).
Equatorial Energia already has control of the distributorships for the states of Maranhao and Para.
With 1.2 million customers, Cepisa is in a "precarious" situation, as the general director of the National Electric Energy Agency (Aneel), Romeu Donizete Rufino, said at a press conference.
"The investment was the result of a qualitative improvement in service and a pricing improvement," he emphasized.
Cepisa, with more than 3,000 employees, ended 2017 with losses of 496.7 million reais ($134.2 million) and currently has debts of 2.4 billion reais ($648.6 million).
Before the start of the Cepisa auction, Mines and Energy Minister Wellington Moreira Franco said that privatizing the distributorships had encountered some problems but that they were overcome for an "extremely just cause."
In June, a Supreme Court justice ruled that privatizations of public firms must get the approval of Congress, which cast doubt on the auctioning of the distributorships.
However, the lower house accelerated the procedures and voted on a bill that allowed privatization to resume, although it must still clear the Senate.
The auction was suspended by a judge after a motion presented by the union representing Eletrobras employees, but the decision was overturned last week by a higher court.