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Eletrobras Assumes Distributors' Debt, Paving Way for Sale of Companies
02/09/2018 - 11h13
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TAÍS HIRATA
FROM SÃO PAULO
Eletrobas defined on Thursday (the 8th) that it would fully assume the multi-billion dollar debt of its six power distributors.
The decision, which was taken during a shareholder meeting in Brasília, will help pave the way to sell the companies, whose performances have come under the scrutiny of analysts in the sector.
The debt that the companies accumulated adds up to at least R$ 11 billion (US$ 3.4 billion). Additionally, there is an ongoing dispute with Aneel (a regulatory agency) which could lead the liabilities to increase significantly.
The decision contradicted the board's initial assessment in which it argued that the parent company should only absorb a portion of the debt, thus minimizing the negative impact the takeovers would have on Eletrobras' books without scaring away potential investors.
However, the Union, which is the majority shareholder of the group, recommended that, in addition to taking on the debt, the parent company should also receive a billion dollar payment that the companies were going to receive from Aneel.
The issue, however, is that the status of this payment is being disputed by the regulatory agency which is claiming that it doesn't owe the companies any money, rather that the distributors owe the agency money.
According to an analyst who participated in the discussions, the government's assessment is that it would be preferable to transfer what could turn out to be a multi-billion dollar debt over to Eletrobras instead of missing out on the opportunity to sell off the distributors.
The government is planning on auctioning off the companies by April at the latest.
Translated by THOMAS MATHEWSON
Read the article in the original language
Pilar Olivares - 20.ago.2014/Reuters | ||
A view of the headquarters of Brazil's power company Eletrobras in downtown Rio de Janeiro |