SECURITIES AND EXCHANGE COMMISSION
CEP 04547-005 - Vila Olímpia, São Paulo – SP
Federative Republic of Brazil
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FC announces conversion of the remaining loan balance into
CPFL Energia’s
shares
São Paulo, July 18, 2005 – CPFL Energia was informed on July 14, 2005 of the IFC’s (International Finance Corporation) intention to convert into shares the outstanding balance of the loan it granted CPFL Energia in June, 2003.
Accordingly, the IFC will convert the outstanding balance of such loan by means of a subscription of 4,159,647 new common shares of CPFL Energia, at a price of R$17.71 per share, resulting in a capital increase of R$73,667,361.38. These new shares shall be issued within ten days counted as of July 14, 2005. Still as a result of this conversion, the IFC will have a 1.22% 1 interest in CPFL Energia’s capital stock and the aforementioned loan will be fully paid.
This conversion will result in an increase of CPFL Energia’s free float, from the current 15.92% to 16.68% 1.
CPFL Energia believes that this conversion is beneficial to it and its shareholders, as it evidences the IFC’s – a well-respected and experienced international institution – confidence in CPFL Energia’s future, a reduction in CPFL Energia’s indebtedness and financial expenses and an increase in its free float.
Expected Ownership Breakdown1
1 Not considering the migration of the minority shareholders of CPFL Geração.
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CPFL ENERGIA S.A.
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By: /S/
JOSÉ ANTONIO DE ALMEIDA FILIPPO
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Name: José Antonio de Almeida Filippo
Title: Chief Financial Officer and Head of Investor Relations
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