BRAZILIAN ELETROBRAS NEED $6.5 BLN

ENERDATA - 30 May 2022 - The Brazilian state-owned power group Eletrobras has filed a share offering request with the securities and exchange commission (Comissão de Valores Mobiliários), seeking to offer 627,675,340 new shares in a primary offering and 69,801,516 shares currently held by Brazilian state-owned development bank BNDES in a secondary offering. The group expects to raise BRL 30.69bn (US$6.5bn, based on a closing price of BRL44/share) from this privatisation bid, which will be priced on 9 June 2022. Moreover, the offering may be increased by 15% through a green shoe option, raising the transaction to BRL 35.18bn (US$7.4bn). The proceeds of the sale should be used by the government to renew the company’s concessions for hydropower plants and transmission lines.

Eletrobras is currently 72% state-owned (51.8% owned by the government, 3.6% by government funds and 16.8% by the BNDES and BNDESPAR). The company is responsible for 28% of Brazil's electricity generation, with an installed capacity of 50,515 MW, and holds about 40% of the country's transmission lines. In July 2021, the Brazilian president signed into law the basic text of a bill allowing the privatisation of Eletrobras, following approvals of the text by the Chamber of Deputies in May 2021 and the Senate in June 2021. The privatisation plan excludes two Eletrobras affiliates: the Brazilian nuclear company Eletronuclear and its 50% stake in the 14 GW Itaipu hydropower plant shared with Paraguay.

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