Latin America's largest electricity company
MADRID, 19 (EUROPA PRESS)
Brazil's Court of Auditors of the Union (TCU) approved on Wednesday with 7 votes in favor and one against the project for the privatization of the state-owned giant Eletrobras.
With the approval of the Brazilian fiscal body, the government wants to submit the documents for the privatization of Latin America's largest electricity company to the Brazilian (CVM) and US (SEC) stock market regulators next week, according to Brazilian media 'Valor'.
The operation is the most important in the privatization agenda of Jair Bolsonaro's administration, which during its mandate has proposed to reduce the weight of public companies in the State.
The privatization model approved in June of last year contemplates a primary offering of new shares in the market by which the Government would reduce its participation to 45%, so that it would lose its status as majority shareholder. In the event that all the shares are not sold in the primary offering, a secondary offering would be made.
In addition, each shareholder or group of shareholders will not have a voting power of more than 10%, while the Government will have the special class preferred share ('golden sahre'), which grants veto power in the decisions of Eletrobas' by-laws.
The operation also excludes from the privatization the subsidiaries Eletronuclear, which operates three nuclear plants in Brazil, and the Itaipu hydroelectric plant, in which the Paraguayan government also holds a stake.
The only vote against the operation in the TCU was that of Justice Vital do Rêgo, who alluded to alleged irregularities in the privatization process, including a possible privatization of Eletronuclear. In addition, Vital do Rêgo requested a postponement of the process until the conclusion of a study on the real value of the company's legal debts.
Having passed the TCU's procedure, it is now the Ministry of Mines and Energy and the National Bank for Economic and Social Development (BNDES), which are collaborating in the process, who have to comply with some recommendations indicated by the court in order to proceed with the sale.
Eletrobras is currently responsible for one third of Brazil's energy generation, with an installed capacity of 50,000 megawatts (MW) and more than 70,000 kilometers of power lines.
At the end of March, the company posted a net profit of 2,716 million Brazilian reais (512 million euros) in the first quarter of the year, which represents a 68% increase on the profits of the same period of the previous year, when the company's result amounted to 1,609 million reais (303 million euros).
The company's gross turnover amounted to 10,980 million reais (2,069 million euros), an increase of 12%. Revenues from the generation area amounted to 6,542 million reais (1,232 million euros), up 12%, while the transmission segment grew by 11.4% to 4,235 million reais (796 million euros).