Brazil's Companhia Estadual de Energia Elétrica (CEEE), a power utility controlled by the state of Rio Grande do Sul, will sell assets including stakes in wind farms, dams and transmission lines aiming to raise as much as 1 billion reais ($250 million).
CEEE's President Paulo de Tarso told Reuters on Friday that the company plans to use most of the proceeds to repay debt to its controlling shareholder.
Several Brazilian states are facing serious financial problems, including Rio Grande do Sul and Rio de Janeiro. Due to the situation, power market participants believed there was a strong possibility of privatization for CEEE.
"This is not in the radar. It is not the instruction we received from the controlling shareholder," said the company's president.
"The objective is to restore the company," he said.
Rio Grande do Sul is struggling with sharp falls on revenues as the economy stalls. The state has delayed payments for public workers.
CEEE is a money-losing company. Its subsidiaries CEEE-GT and CEEE-D lost some 790 million reais last year, according to Tarso.
CEEE-GT, the generation and transmission arm, holds 1 gigawatt of installed hydropower capacity, besides minor stakes on wind farms and 6,000 km (3,700 miles) of power transmission lines.
The power distribution company (CEEE-D) recently renewed its concession for a new term of 30 years.
Tarso said the company will also sell real estate and is weighing layoffs of up to 200 workers. The utility's website lists a total of 4,400 employees.
($1 = 4.001 reais)
(Reporting by Luciano Costa; Writing by Marcelo Teixeira; Editing by Lisa Shumaker)