Exclusive: Brazil to delay auction for five of six Eletrobras distributors

By Belén Carreño

MADRID (Reuters) - Brazil's government will go ahead with the auction of one of state-owned utility Eletrobras' power distributors planned for July 26, while delaying five others to Aug. 30, Planning Minister Esteves Colnago told Reuters on Monday.

Cepisa, the utility's energy distributor in the northeastern state of Piaui, has drawn the most interest and will be auctioned as planned despite recent legal challenges, Colnago said in an interview during a visit to Madrid.

There are "several groups" interested in Cepisa including potential Spanish buyers, Colnago said, without elaborating.

Centrais Eletricas Brasileiras, as Eletrobras is formally called, is seeking to offload the six heavily indebted distributors ahead of government plans to privatize the overall company.

The auctions hit a snag after a Supreme Court judge in June ruled that all privatizations must be approved by Congress moving forward, with a lower court stepping in to apply the decision to Eletrobras. The lower house of Congress gave its approval earlier this month to privatize the distributors, but the Senate has yet to vote on the matter.

The government initially said it would maintain the scheduled auctions of all the distributors set for July 26 as it appealed the decision, but Finance Minister Eduardo Guardia said earlier on Monday it was "no problem" to delay as legal issues are sorted out.

(Reporting by Belén Carreño; Writing by Marcela Ayres and Jake Spring; Editing by Christian Plumband Leslie Adler)