A bid by Energisa SA to takeover Grupo Rede Energia SA was approved on Friday by the company's creditors. Grupo Rede Energia SA was a power distributor in Brazil, while Energisa was its rival company.

The takeover plan, however, was pending approval by the bankruptcy court, said Grupo Rede Energia's lawyer Thomas Felsberg.

The firm proposed to pay creditors US$862 million and raise the remaining amount in the form of fresh investments. If the proposal obtained court approval, creditors would only receive 25% of their initial investment in the company.

Grupo Rede Energia had eight of its units seized by the energy regulator Aneel in August. Since then, the company has been struggling to deliver electricity services to six states in Brazil.

Because of problems in its finances and operations, Grupo Rede Energia has been eyed both by the Brazilian government as well as private firms for a possible takeover.