Comando para Ignorar Faixa de Opções
Ir para o conteúdo principal
Logon
Navegar para Cima

Brazilian Government takes first steps towards the privatization of Eletrobras

Elapsed=00:00:00.0995375
Por :

16/11/2017 00:00 Demarest News

Brazilian Government takes first steps towards the privatization of Eletrobras

On November 7, 2017, the federal government published Decree 9,192/2017 (the "Decree"), which establishes the guidelines for the privatization of electricity distributors and transmission companies which are currently controlled by Federal, State and Municipal Governments (the "State Owned Companies"). The privatization of the State Owned Companies will be associated with the concession of electricity services which are currently rendered by them. In summary, the winning bidders will be awarded with both the corporate control of the Companies and the concession of the electricity distribution services in the area where they currently operate.

The goal is to solve the existing deficit rate and allow the government to concentrate on other important activities.

According to the Decree, the National Agency for Electrical Energy (ANEEL) will establish tariff parameters to enable the economic-financial balance of contracts.

Moreover, also as part of the plans for the privatization of electricity distribution Companies, the Council of the Federal Program for Investments Partnerships (CPPI) published Resolution 20/2017 on November 9, 2017. The resolution approves the methodology of public auctions for the disposal of the corporate control of six electricity distributors which are currently controlled by Eletrobras.

Eletrobras is the leader in generation and transmission of electric energy in Brazil and is also considered the largest Brazilian electricity generation company, with a generating capacity equivalent to about 1/3 of the country's total installed capacity.

The following companies, which are responsible for the rendering of distribution services in North and Northeast regions of the country are to be privatized:

Company

​Main State where it operates

​Total % of capital stock for sale​Capital increase undertaking
​Eletroacre ​Acre (North)​96.71% of common shares, less one​R$ 238,805,729.30
​Ceron​Rondônia (North)​100% of common shares, less one​R$ 41,099,855.91
​Cepisa​Piauí (Northeast)​100% of common shares, less one​R$ 720,915,595.51
​Ceal​Alagoas (Northeast)​100% of common shares, less one​R$ 545,770,485.33
​Boa Vista​Roraima (North)​100% of common shares, less one​R$ 175,999,185.71
​Amazonas Energia​Amazonas (North)​100% of common shares, less one​R$ 491,370,787.84

 

Buyers will be allowed to acquire more than one Company. The control of each Company will be sold for the nominal value of R$ 50.000,00 plus an undertaking by the buyer to increase the capital stock of the acquired company in the amounts detailed in the chart above.

Eletrobras will have the option to increase its participation to up to 30% (thirty percent) within the first 6 months as of execution of the share purchase agreements. Furthermore, the Companies' employees and retirees will have the option to acquire Eletrobras' remaining quotas.

Both the right of Eletrobras to acquire up to 30% of the capital stock of the companies and of the employees and retirees are still to be further detailed in the public procurement documents.

The control of the Companies will be awarded in accordance to the bidders offering the lowest tariffs and/or the highest grants to the Government, as set forth in Federal Law 8,987/1995 (Public Service Concession Law).

In order to make the sale feasible, Eletrobras will assume a total of R$ 11.2 billion of the Companies' debt. A debt of approximately R$ 9 billion is related to Amazonas Energia and R$ 1.8 billion to Ceron. Eletrobras will also assume any debts of the distributors that are related to the fuel consumption account (Conta de Consumo de Combustíveis – CCC) and energy development account (Conta de Desenvolvimento Energético – CDE).

The Decree and the Resolution constitute a first step towards the privatization of Eletrobras and its assets. The government plans to issue the public procurement documents between February and March of 2018. Until then, important aspects of the privatization model will have to be fully clarified. In this sense, the Government expects to approve in the Congress a specific law in order to regulate the matter within 60 days counted from the date of the Decree (but this deadline is not mandatory). 

Considering the relevance of the topic, Demarest Infrastructure and Energy teams closely follow the development of the subject, being available to provide advice on this and other matters relevant to the Brazilian Electricity Sector.

Demarest Advogados


Publicações Relacionadas

Cadastre-se para receber a newsletter

Skip Navigation Linksdemarestnews-brazilian-government-takes-first-steps-towards-privatization-eletrobras