Mexico closes down energy firm

Mexico has closed a state-run energy distribution firm with about 40,000 employees and 25 million customers, blaming the scale of its losses.

Federal police seized the offices of Luz y Fuerza del Centro. Spending at the company was increasingly outpacing sales, according to the government.

The firm faced an "unsustainable financial situation", President Felipe Calderon said.

Mexico is trying to cut public spending to offset falling oil revenues.

The Federal Electricity Commission, a state-run utility that provides electricity across the rest of the country, is to provide services to Luz y Fuerza's customers.

The firm's costs between 2003 and 2008 were 433bn pesos (£20.6bn; $32.5bn) while its sales were 236bn pesos, the government said.

Mr Caldron said the utility company could not continue to be funded without increasing electricity rates or taxes.