December 2, 2023

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Eletrobras (ELET3): The TCU's decision is a setback for the government and hinders, but does not stop, privatization, analysts say.  stock closing

Eletrobras (ELET3; ELET6) launches a stock offering on Friday; Pricing will be on June 9th

Eletrobras (ELET3;ELET6) Friday (27) delivered the necessary documents to implement the share offer with a view to its privatization, officially launching a market operation that could generate about 30 billion Brazilian reals according to government estimates.

The deal will include a primary and secondary bid for regular verbs Conducted simultaneously in Brazil and abroad. The initial offering will be 627,675,340 new shares.

The statement also stated that the number of shares in the initial offering could be increased by a complementary share of up to 15% of the total shares.

The booking period runs from June 3 to June 8 (June 7 for priority reservations). The process of collecting investment intent (“ledger building”) will take place on June 9, when the stock price is determined, according to a statement delivered to the Securities and Exchange Commission (CVM). Trading in the Offer Shares will start on June 13.

With the official launch of the offer on the market, the next steps are the “roadshow” to present the opportunity to investors and collect investment intentions, when the market demand for the operation and the final value of the stock from the offer is effectively determined.

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Pay Santo Antonio Energia

It is worth noting that the Electricity Company was informed of the approval of the Board of Directors to pay, by its subsidiary Firnas, all shares of Madeira Energia – the parent company of Santo Antônio Energia which may remain after the capital increase that may not be accompanied by other partners in the Corporation.

It republished its first-quarter balance sheet, “in the context of the public offering of shares to be executed by the company,” to include a review of the independent auditor’s assessment with respect to Santo Antonio, warning of the possibility of default.

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Santo Antônio Energia, which controls a hydroelectric plant of the same name on the Madeira River (sO), must implement a capital increase of about R$1.5 billion by the end of this month to counter an unfavorable arbitration decision.

However, company partners may not accompany the process – Cemig (CMIG4), for example, has already announced to the market that it will not make the contribution corresponding to its 8.53% stake in Madeira Energia.

In addition to Cemig and Furnas – which hold the largest share of the capital of Madeira Energia, with 43.06% -, Novonor (formerly Odebrecht, with 18.25%), Caixa FIP Amazônia Energia (19.63%) and SAAG (one of Andrade Gutierrez, with 10.53%). ).

According to a statement from Eletrobras released on Thursday, Furnas bondholders will have to agree to a capital increase in Madeira Energia. A meeting of bondholders was scheduled for May 30.

If you don’t get this approval, Eletrobras cautions that the debt represented by the bonds must be declared late in advance, “which could have a material adverse effect on Furnas and the company as a result of a default or cross acceleration (cross acceleration or default crossover) of your debts.”

In its quarterly information form (ITR) updated Friday, Eletrobras notes that if it doesn’t get the waivers, it may not be able to meet most of its payment obligations.

“Similarly, the company believes that it will not have sufficient resources to pay most of its debts if it becomes due and accrued immediately and continue to implement its business plan, which could jeopardize its operations, financial condition and results of operations.” .

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As of March 31, Furnas had a total debt of about R$7 billion, and Eletrobras consolidated debt was R$41.6 billion.

This month, Eletrobras president, Rodrigo Lemp, commented that Eletrobras was analyzing “all scenarios” regarding Santo Antonio Energia, “including (other partners) not making the contribution.” “We will not be able to determine what will happen in the worst-case scenario eventually, but eventually we will have to negotiate with the creditors,” Limp said at the time, adding that he did not see any impact of the Santo Antonio operation on the company’s capitalization. .

(with Reuters)

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