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The head of Brazil's power regulator, Aneel, suggested that Italy's Enel could divest its Sao Paulo distribution unit to a third party to mitigate financial losses. This strategic move follows growing threats of concession termination due to alleged poor performance and service failures in the region. By selling the contract, Enel aims to recover asset value and avoid the total forfeiture of its operations in Brazil's largest city. Market analysts view this potential sale as a floor for the asset's valuation amid escalating regulatory risks. The situation remains critical as the regulator moves toward terminating the concession, making a private sale a more favorable exit strategy for the utility giant. This development is an incremental update to the ongoing performance dispute between Enel and Brazilian authorities.
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