Accounts court delivers major blow to Bolsonaro’s privatization plans

Plans to privatize massive energy company Eletrobras suffered another setback on Wednesday, as Brazil’s Federal Accounts Court suspended a trial to decide whether or not to approve the government’s proposal to dilute its stake in the firm and hand it over to private control.

Vital do Rêgo, one of the court’s members, chose to take the case under advisement, asking for more time to analyze the deal’s terms. His peers agreed to adjourn the trial, pushing it back by 20 days.

Mr. Rêgo had previously voiced concerns that Eletrobras’s assets were being undervalued, particularly with regard to its hydroelectric plants. He says their price must take into account their full capacity, instead of just average generation. Experts, meanwhile, fear that if he gets his way, the privatization process will collapse due to a lack of interested investors.

While expecting Mr. Rêgo to ask for a delay, the government had hoped to put enough pressure on the accounts court to have the trial pushed back by just seven days — eyeing a public offering of Eletrobras shares before the end of May. The...