Eletrobras says Brazilian president approves privatisation plan, shares surge

[SAO PAULO] Brazil's state-controlled Centrais Eletricas Brasileiras SA, known as Eletrobras, said in a securities filing on Thursday that President Jair Bolsonaro had authorised studies into privatising the power company via a share offering.

The company, which is responsible for almost one third of the generational capacity and half of Brazil's power transmission grid, said the privatisation would need to be approved by Congress.

Mr Bolsonaro, who was elected last year on an economic platform that included aggressive pro-market reforms and privatisations, met with Eletrobras' chief executive officer Wilson Ferreira Jr on Thursday, sending the company's share price to a record high on hopes it might be privatised.

Eletrobras said late on Wednesday that the company's "potential privatisation" would be discussed. According to the company, Ferreira Jr was invited by Mines and Energy Minister Bento Albuquerque to discuss the issue with Mr Bolsonaro in the presidential palace.

The Ministry of Mines and Energy declined comment.

The government has not yet released the model for the power company's privatization but the Ministry of Mines and Energy has stated it would involve issuing new shares to inject capital, reducing the government's stake to a minority position.

In a recent TV interview, Mr Albuquerque said the government could raise 18 billion reais (S$7.14 billion) in such a deal.

Eletrobras preferred shares rose more than 5.5 per cent on Thursday.

REUTERS