LA PAZ, Bolivia, June 30— Bolivia announced the sale of a controlling interest in its state electricity company to three American companies for $139.8 million, the first step of an ambitious program to transfer ownership of key industries to private hands.
The Government agreed to sell a 50 percent stake in Empresa Nacional de Electricidad to Dominion Energy Inc., a unit of Dominion Resources Inc. of Richmond; Energy Initiative Inc. of Parsippany, N.J., and Constellation Energy, a unit of the Baltimore Gas and Electric Company.
Although the transaction was small by international standards, it was closely watched by investors because the utility was the first of six major Bolivian industries that will be put on the auction block this year and because of the novel way in which the deal was structured.
Unlike traditional privatizations, in which a government sells full ownership of a company, Bolivia has devised a "capitalization" program in which investors agree to invest a specified sum of new capital. In return, they get a 50 percent share and management control. The other 50 percent of the company is put into a fund to provide a guaranteed pension for all Bolivians.
The idea is to encourage economic activity and create desperately needed jobs while building up a national retirement system.
Although Bolivia adopted an economic stabilization plan in the mid-1980's that revamped its economy and reduced inflation to 8.5 percent from 24,000 percent, it is one of the poorest countries in Latin America, with 30 percent unemployment.
The American companies submitted the highest of seven bids for the electric company, known as Ende. The selling price was substantially higher than the minimum of $99.1 million set by the Government, but far less than the $250 million that some analysts and Government officials had estimated the company to be worth.
Even so, David R. Evert, a spokesman for the Ministry of Capitalization, which is overseeing the sale of state companies, said the Government was delighted. "The success of the electric company bodes very well for future capitalizations," he said. "I think this sends a message to the investment community that Bolivia is serious."
Bolivia plans to sell shares in five other state companies this year involved in oil, telecommunications, railroads, airlines and smelting. Altogether, the transactions are expected to generate as much as $2 billion in investment capital.
The capitalization program is the brainchild of President Gonzalo Sanchez de Lozada, a mining entrepreneur who was raised in the United States and became President two years ago. He devised the plan after opinion polls showed that Bolivians were generally opposed to traditional privatizations, which they equate with the loss of national independence and with corruption.
"I would have preferred to sell all these companies through conventional privatizations and use the proceeds to balance the budget and finance social programs, but we were convinced that public opposition would have been too strong to allow us to go that route," Mr. Sanchez de Lozada said.
Investment bankers and economists say the Bolivian program is attractive to investors because it not only gives them complete management control of the company but also lets them use all the money they invest to expand and modernize a company.
But there are risks associated with capitalization. Not only is it an untested formula in an economically depressed nation of just seven million people, but also opposition to it has been growing from labor unions and opposition politicians.
Some critics contend that it will destroy, not create, jobs, while others complain that the state could raise more money through conventional privatizations.
The American buyers said they were attracted by Bolivia's internal demand for electricity, which is growing by 7 percent a year, and the potential to export gas and electricity to surrounding countries.
"One of the big problems that companies face after they buy into a privatization is coming up with the money to expand and improve operations," said Ed Geehan, Constellation's manager of international projects. "This is not something we have to worry about."
The capitalization program fell behind schedule recently as the Government struggled to approve new laws governing the newly capitalized industries and pension fund.
Ende will be split into three power-generating units that will be operated separately, each by one of the three American buyers.
