As expected, the privatization process was postponed due to requests for opinions from Minister Vital do Rêgo. The deadline for returning the case should be 20 days, which is set by President Anna Arres, who asked: “Given the complexity of the matter and the need for legal certainty in the decisions of this court, I will determine the opinion of the legal body before presenting the opinion of this plenary session.”
The decision was announced after an intense discussion by college ministers about a deadline to postpone the trial, which could hurt the schedule the government considers ideal to carry out the process in the first half of the year.
Minister Vital do Rigo initially wanted a 60-day period while his colleague Jorge Oliveira, who was a minister in President Jair Bolsonaro’s government, suggested a shorter period of seven days.
Amid the incompatibility, a period of 20 days prevailed, the shortest time identified by the cohort for stopping the trial.
The Special Rapporteur on the privatization of electricity, Aroldo Cedraz, began the session by reading his vote, saying that this was a “giant step towards the evolution and even transformation of our energy matrix”. Cedras highlighted economic and financial modeling, which “leads to absolute control” of the state-owned company, through capital increase and company restructuring.
Cedraz defended his decision that privatizing the company includes a contract clause so that the union can enjoy additional gains from a potential sale of energy by Eletrobras’ hydroelectric plants. The rapporteur said he does not agree with the government’s position that the inclusion of this clause can reduce the amounts involved in privatizing the state-owned energy company, such as granting a grant to renew hydropower concessions.
The The decision also came to the defense Changes to the “toxic pill” clause – which gives guarantees to minority shareholders and prevents shareholder control – to allow for the eventual renationalization of Eletrobras. But he said he reconsidered his initial position on the subject after receiving contributions from Minister Jorge Oliveira.
It should be noted that the high expectation was for the period in which the trial would be suspended, as Minister Vital do Rigo asked for opinions (more time to analyze the case), who confirmed the request, as he has publicly stated since. yesterday.
At the beginning of his speech, he repeated a request that the period of consideration that the court would give be 60 days, which is the maximum period that ministers are entitled to obtain.
For the government and market agents, this deadline will render privatizing Eletrobras in May unfeasible. In the meantime, negotiations were underway on the radar for a maximum of 7 days, which would ensure a share offering that would result in a loss of control of the shares by Union on May 13.
Then, following the other court members’ speech, the minister reconsidered the deadline, noting that the order be returned within 20 days and not after 60.
In his presentation, Vital criticized the lack of information on the impact of privatization on the electricity bill of energy consumers. According to him, the donor authority “did not calculate” the tariff impact of the operation because it claims that it did not have enough time. Also, according to the minister, there are inconsistencies in the planned investments of the privatized Eletrobras.
“There is a clear contradiction between the discourse justifying the privatization of Eletrobras, guaranteeing investments, and among the studies submitted to TCU that predict the complete absence of investments at the end of 30 years … the thesis of guaranteeing investments to the sector does not stop.”
Minister Jorge Oliveira and Bruno Dantas argued that Vital do Rigo should reconsider his application for a visa for up to 60 days. “I am thinking with His Excellency Minister Vital that he can waive his request for an opinion and that we can deliberate the case,” Oliveira said, defending the 7-day period should there be opinions.
Benjamin Zimler has already stated that it will not be possible to reduce the showtime to less than 20 days.
It should be noted that Eletrobras shares closed Wednesday’s session with a strong rise, as ELET3 closed with a gain of 3.94%, at 42.40 Brazilian riyals, while ELET6 shares rose by 4.60%, at 42.27 Brazilian riyals, amid discussions.
The first phase of the analysis of privatization was already approved by TCU in February, and the grant award was analyzed that, after privatization, Eletrobras would have to pay the federal government for the renewal of contracts for 22 hydropower plants.
In the second stage, the court evaluates the sales model proposed by the union, including the range of value of the shares to be offered on the stock exchange. Currently, the consortium owns 72.33% of the voting capital of Eletrobras – with privatization, this percentage will drop to 45%. The state’s stake in the company is diminished by the issuance of new shares.
With the restructuring of the company, the consortium will continue to control Eletronuclear and Itaipu and continue sectoral programmes, including Procel and Luz para Todos. The privatization model also states that shareholders will only be able to vote up to 10% of their share capital, regardless of the size of their stake in the company, which will make Eletrobras a company without a defined controller.
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