CESP sale delayed.

SAO PAULO -- The privatization of CESP-Parana, the third largest generator in Brazil, was postponed this week as six foreign investors failed to put down financial guarantees. The auction will now be delayed until at least January, and perhaps as late as March.

US energy firms AES,

Duke Energy and Southern Energy, Spanish company Endesa, Eletricidade de Portugal and Electricite de France had all pre-qualified at earlier stages of the privatization process. However, government reservations about a tripling of plant capacity and a maturing debt may have scared off some bidders. Analysts expect the environmental issues to be removed and debt rolled over by March. State Energy Secretary Mauro Arce said that the minimum price of RS 1.7 billion, which many analysts believe to be too high, will not be reduced for the future auction.

The privatization of Cesp-Parana was expected to serve as an indicator of demand for future government privatizations. Its delay may postpone the offering of the Furnas utility of Eletrobras, which was scheduled to be sold in the first half of 2001.