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Brazil's Petrobras reaches debt deal with Eletrobras, aiding privatization process

SAO PAULO, April 30 (Reuters) - Petroleo Brasileiro SA said on Monday it had reached an agreement with Centrais Eletricas Brasileiras SA, commonly known as Eletrobras, regarding the renegotiation of part of nearly 20 billion reais ($5.76 billion) in debt owed to the state oil company.

The agreement is seen as key to allowing a privatization process planned by Eletrobras to go forward.

The state electricity company has said it plans to auction off the power distribution units it holds in Brazil's northern and northeastern regions in June. But Petroleo Brasileiro, or Petrobras, had threatened to hold up the process, citing the debts that Eletrobras' distribution subsidiaries, particularly its distribution unit in Amazonas state, owed to the oil company.

"The contractual instruments in this process will be signed by the parties today," Petrobras said in a statement, without elaborating on the terms of the deal.

The company added in the statement that it will offer more information about the agreement at a later time. ($1 = 3.47 reais) (Reporting by Luciano Costa; Writing by Gram Slattery; editing by Jonathan Oatis)