The Mexican Government has issued a decree ordering the liquidation of Luz y Fuerza, the nation’s second-largest power supplier, amid mounting losses.
The legal conditions to start liquidating Luz y Fuerza will be published by the secretary of energy until 14 October.
The power utility provides power to 20 million people and several states surrounding Mexico City, satisfying 30% of the entire country’s energy needs. It employs 44,000 people.
President Felipe Calderon told national television that the costs were double the revenue, while Energy Minister Georgina Kessel Martinez said the company lost an annual $1.1bn (15bn pesos) worth of energy through theft, technical issues and corruption.
The power company’s headquarters and other facilities were seized by federal police officers.
Mexico’s largest state power company Commission Federal de Electricidad may take over operations of Luz y Fuerza or a new state company may be created for the asset handover, top ministers said.