This was the first step towards privatization. Once a single company, it was broken down into smaller companies:
– Eletropaulo Metropolitanaresponsible for distribution in the city of São Paulo and the metropolitan region;
– Bandeirante Energy Companyresponsible for areas of Greater São Paulo and part of the Metropolitan Region of Vale do Paraíba and the North Coast;
– São Paulo Energy Transmission Companylater incorporated by Companhia de Transmissão de Energia Elétrica Paulista;
– Metropolitan Water and Energy Company (EMAE)responsible for the state hydraulic system.
After the break-up, the companies became worth R$8.2 billion, as Folha de S. Paulo reported at the time, and were put up for auction on the then Bovespa.
The initial bid for Eletropaulo Metropolitana, the largest and most profitable of the companies, was R$2.026 billion.
The auction was won on April 15, 1998 by the Lightgás consortium, being divided as follows: AES Corporation (11.46%), Houston Industries Energy (11.46%), Électricité de France (EDF) (11.46 %) and Companhia Siderúrgica Nacional (7.32%).
In 2001, after the sale of shares in Houston Industries and CSN to AES Corporation, Eletropaulo became known as AES Eletropaulo and remained that way until 2018, when a new auction was held for control of the company.