Political, legal and administrative war: See the stones in the way of Eletrobras privatization

Political, legal and administrative war: See the stones in the way of Eletrobras privatization

Sale is pointed out by experts as essential to recover investment capacity, but critics point to risks to energy security

Before the end of the Eletrobras privatization trial at the Federal Audit Court (TCU), critics are already planning the next steps to stop the sale of control of the company. Legal actions, complaints to regulatory bodies and political initiatives on the subject are expected. Opposition parliamentarians, who tried to suspend the trial at the TCU, have already stated that they will go to court.

— The effort is to focus fire to prevent the government from privatizing Eletrobras — said deputy Bohn Gass (PT-RS).

Deputy Alessandro Molon (PSB-RJ) says that the opposition will even take place in the Federal Supreme Court (STF):

— We cannot allow this delivery of public assets, which will prevent the execution of a national development project.

The government tries to anticipate and prepares the Attorney General’s Office (AGU) to answer any questions.

It won’t be the only opposition action front for sale. The Eletrobras Employees Association (AEEL), the Furnas Employees Association (Asef) and the National Electricians Collective (CNE) will once again file complaints with the SEC (Securities and Exchange Commission, the regulatory body for the American market).

The entities had already filed a complaint this week pointing out that the company had failed to inform investors about the billion-dollar risk with the Santo Antônio plant. The hydroelectric plant lost an arbitration process, which will make the partners need to make an injection of resources.

It is not clear whether, in addition to Furnas, the other shareholders will join the operation. The entities point out that, in the worst scenario, Eletrobras would have to pay the debts of Santo Antônio, a total that reaches R$ 18 billion.

The civil servants’ associations point out that the Belo Monte plant, which has the subsidiary Eletronorte among its partners, has an overvalued value. The entities also intend to denounce problems at the Itaipu Power Plant: the process transfers the binational company to ENBpar, a new state-owned company that would gather the assets that cannot be privatized.

See what Petrobras has already sold and what it intends to sell

See what Petrobras has already sold and what it intends to sell

According to the entity, this would be done without negotiation with the Paraguayan partners. The third initiative criticizes Eletronuclear’s transfer rules to ENBpar, with the assessment that it could harm current Eletrobras shareholders.

“We have to listen to the advisors to determine the next steps in relation to lawsuits,” said Marcelo de Queiroz, director of Asef.

Economist Cláudio Frischtak, from consultancy Inter.B, says that votes with reservations to the model may allow questions in court:

— The question is whether judges of first or second instance, or even ministers of the STJ, can grant injunctions to delay or prevent privatization.

In the political sphere, the sale of Eletrobras would be the only possibility for the government to privatize a state-owned company. So far, only subsidiaries have been transferred to the private sector.

Source: The Globe

Related post

Petrobras (PETR4): Could political turmoil further impact the company’s actions?

Petrobras (PETR4): Could political turmoil further impact the company’s…

Largest company in market value on the Brazilian Stock Exchange, Petrobras (PETR4) has always seen its shares with guaranteed space in…
Pulp shortage, with war in Ukraine, pushes prices to record levels

Pulp shortage, with war in Ukraine, pushes prices to…

Manufacturers in Europe rely on Russian timber, whose production remains impacted by sanctions due to the war in Ukraine; unexpected supplier…
Can the government privatize Petrobras following the same model as Eletrobras?

Can the government privatize Petrobras following the same model…

The government once again considered the privatization of Petrobras through a model similar to the one used to privatize Eletrobras, that…

Leave a Reply

Your email address will not be published.