MILAN, April 27 (Reuters) - Fitch has downgraded the credit rating of Enel Brasil, a unit of Italian utility Enel, citing rising uncertainty over the renewal of the subsidiary's main distribution concession in the South American country.
The agency said late on Friday it assigned a negative outlook on all corporate ratings of the unit.
Fitch cut Enel Brasil S.A.'s national long-term rating to AA+(bra) from AAA(bra) and removed its negative watch.
The downgrade also applies to subsidiaries Eletropaulo Metropolitana Eletricidade de Sao Paulo - Enel Sao Paulo - Ampla Energia e Serviços S.A. - Enel Rio - and Companhia Energética do Ceara - Enel Ceara.
Brazil's energy regulator earlier this month started an administrative process to potentially revoke Enel's Sao Paulo's power concession, which expires in 2028, citing alleged "structural failures" in the provision of services following extreme weather events in recent years.
Enel has another opportunity to present its defence before the regulator decides whether to recommend to the federal government that the concession be revoked.
Fitch said a potential loss of the licence would significantly weaken operating efficiency and profitability at Enel Brasil.
The Italian group has assets worth about 3.34 billion euros and 595 million euros in goodwill tied to a power concession in Brazil which it may lose, its auditors said in the group's annual report.
As of December 2025, Enel Sao Paulo's third‑party debt stood at 8.4 billion reais ($1.7 billion), equivalent to 47% of Enel Brasil's consolidated debt. Fitch said the outlook could worsen if the concession is not renewed or is terminated.
($1 = 4.9795 reais)
Reporting by Francesca Landini, editing by Alvise Armellini
Source: Reuters