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Eletrobrás Likely to Be Privatized During Brazil's Presidential Election

12/11/2017 - 11h18

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MARIA CRISTINA FRIAS
FROM SÃO PAULO

One of the biggest operations of its kind in Brazil, the privatization of Eletrobras, a major government-owned electric utilities company, is likely to occur between September and December 2018, says Wilson Ferreira Júnior, the company's president who gave an interview to Maria Cristina Frias.

The dates coincide with the Brazilian presidential election; however Ferreira Júnior says that it will not affect the attractiveness of the stocks put up for sale.

"Neither foreign nor Brazilian investors say that there is a problem. If there is an opportunity in a 30-year-old business, well, it has nothing to do with the election. I have no doubt that there is interest in the company because these are the last power plants in the country. After them, the map will be nearly complete."

The country's Lower House and Senate, including members of the government's base, have shown resistance to the privatization.

"If it does not occur, each power plant will be sold, one by one. Eletrobras would keep all the costs and would lose its installed capacity of 14,000 megawatt-hour (MWh), the equivalent to what the Itaipu power plant produces. Can Eletrobras afford that? I doubt it."

The sale of the company will be done through capital increase. The government will not use resources, its share in the company will reduce and it will lose corporate control.

The government will have a "golden share", which will give it a decisive vote in strategic themes. The de-nationalization will include Chesf and Furnas. The bill will be sent to congress next week, says Ferreira Júnior. "That is the schedule of the Minister of Mines and Energy, Fernando Coelho Filho.

Translated by THOMAS MUELLO

Read the article in the original language

Paulo Whitaker/REUTERS
Brazil's state-led electricity-utility holding company Eletrobras CEO Wilson Ferreira Jr attends an economics and politics forum in Sao Paulo
Brazil's state-led electricity-utility holding company Eletrobras CEO Wilson Ferreira Jr attends an economics and politics forum in Sao Paulo

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