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In Parallel, the Bolsonaro Government Also Issued a Provisional Measure (MP) That Establishes the End of the Monopoly of the Mint in the Production of Banknotes.
Today, November 5th, the law project defining the privatization model of Eletrobras was signed by President Jair Bolsonaro, which is currently responsible for about one-third of energy generation capacity and half of energy transmission in Brazil. The Privatization of the Company Generates Expectations of R$ 16.2 Billion for the Government.
According to the report, which will still need to be deliberated by the National Congress, the privatization of Eletrobras will occur through a capitalization process that will dilute the Union’s stake in the company.
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According to the Executive Secretary of the Ministry of Mines and Energy, Marisete Pereira, the project also assumes that the process may involve an additional, secondary offering.
The company’s capitalization is scheduled for the second half of 2020 and is expected to generate funds for Eletrobras to pay the Treasury R$ 16.2 billion as a grant bonus in exchange for the renewal of contracts for a number of older hydroelectric plants under more favorable conditions.
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Currently, the Union holds 40.99% of Eletrobras’ share capital, but with 51% of the common shares with voting rights.
However, the privatization bill will stipulate that none of the shareholders of the state-owned company can have more than 10% of the votes, not even the Union, said the Minister of Mines and Energy, Bento Albuquerque.
The National Bank for Economic and Social Development (BNDES) holds 5.51% of the capital, while the bank’s investment arm, BNDESPar, has 10.48%.
In parallel, the Bolsonaro government also issued a provisional measure (MP) that establishes the end of the monopoly of the Mint in the production of banknotes.
Eletrobras was proposed to be created in 1954 by then-President Getúlio Vargas and officially came into existence in 1962, under the presidency of João Goulart.
The state-owned company’s assets were studied for privatization in the 1990s, during Fernando Henrique Cardoso’s government, when a subsidiary in the southern region was sold, but the plans did not advance due to political resistance.
More recently, during Michel Temer’s administration, the Ministry of Mines and Energy resumed discussions regarding privatization.
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