By a 6-1 majority, the Federal Accounts Court approved the first — and most complex — step in the privatization process of Eletrobras, Latin America’s biggest energy company. Tuesday’s decision made the government confident that it will be possible to carry out the deal by May.
Ordinary shares of Eletrobras went up by over 6 percent in value after a rally in the last moments of the trading session.
The sole vote against the government’s project came from court member Vital do Rêgo, who claims Eletrobras assets have been undervalued. His office says the privatization should be valued at BRL 130.4 billion (USD 25.2 billion) instead of the BRL 67 billion aimed at by the government.
Mr. Rêgo says the pricing of hydroelectric plants must take into account their full capacity instead of average generation — but experts believe that if his understanding had prevailed, the privatization would sink due to a lack of interested investors.