After Americanas Crisis, Aeel Highlights Concerns Over Possible Issues in the Electricity Sector and Risks to Eletrobras

The Former State-Owned Company Has Some Shareholders in Common with Americanas, Which Has Just Suffered a Major Economic Crisis. A Aeel Is Concerned About the Possible Influence of This Management Model on Eletrobras and the Consequences in the Electricity Sector.

After the major crisis announced by Americanas in recent weeks, various sectors of the national market are moving to seek stability. Last Tuesday (01/17), the Association of Eletrobras Employees (Aeel) drew attention to the future of the former state-owned company. This is because Eletrobras has a group of shareholders in common with the company, putting the next steps of management at risk. A potential crisis in the electricity sector is the main concern of the association.

Aeel of Eletrobras Is Concerned About the Influence of the Company’s Current Management Model and Problems in the Electricity Sector After the Crisis at Americanas

The national market has witnessed in recent weeks one of the largest crises announced in the country, the debt of nearly R$ 40 billion announced by Americanas.

Thus, a number of companies with common shareholders with the retailer have initiated a process of re-evaluation and restructuring of their administrations, aiming to avoid a potential crisis.

Among the companies that have the same group of shareholders as the retailer is the former state-owned company Eletrobras.

3G Radar, the largest preferred shareholder of Eletrobras, has as partners Jorge Paulo Lemann, Marcel Herrmann Telles, and Carlos Alberto Sicupira, who are the main shareholders of Americanas.

The Aeel of the company recently expressed its concerns about the future management of the company following the crisis at Americanas.

A potential collapse of Eletrobras would bring countless influences to the national electricity sector, with irreparable damage.

After the privatization of Eletrobras in July of last year, the company 3G Radar became the largest preferred shareholder of the former state-owned company, with 10.88%, above BNDESP (6.68%), in addition to the National Bank for Economic and Social Development (BNDES), which holds 6.52% of the preferred shares.

The Aeel highlights that the shareholders of 3R Radar have a short-term view regarding the company’s management, similar to what happened with Americanas.

Thus, this would become a long-term concern in the electricity sector, given the crisis that occurred with the retailer.

“The new accounting scandal raises a yellow flag for Eletrobras and should serve as a warning to the new Brazilian government. It is becoming increasingly clear that this management model produces only very short-term results, leading to large disasters in the medium and long term,” said Aeel.

Aeel Highlights Internal Reforms in Document Sent to the Press and Warns of Possible Risks to the Electricity Sector

Aeel announced in a recent document that the Board of Directors of Eletrobras recently approved a new share buyback policy and changed its dividend payment policy.

The approval had occurred under the influence of 3G Radar, the same shareholders as Americanas. 

“In addition, it rewarded its executives with 400% increases and adopted a new method to reward its executives with variable compensation based on shares. The focus is solely on the pursuit of profits, dividends, and bonuses in the very short term,” said the association.

Increasing further the entity’s concerns regarding a crisis in the electricity sector, the association stated that, just like Eletrobras, Americanas also went through a capital increase.

It also warns of the possible involvement of the company’s executives and the auditors from PwC, who validated the privatization of Eletrobras, due to the common shareholders.

Despite this, Aeel cannot act more than it already is to prevent a potential crisis in the electricity sector caused by the management of the shareholders of Americanas in Eletrobras.