Good morning! Today, we explain the massive Eletrobras share offering. And Brazil’s diplomatic woes with the U.S. and Chile.
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A historic move for Brazil’s energy sector
Brazil’s massive state-controlled energy company Eletrobras confirmed, in a securities filing, that it has priced offered shares at BRL 42 in a move that results in the firm’s privatization. The deal will raise BRL 29.3 billion (USD 5.9 billion). Demand for shares was near BRL 70 billion, per Reuters.
- Eletrobras’s American depositary shares (ADS) were priced at USD 8.63.
Why it matters. It will be the biggest share offering in Brazil since 2010 — and will hand Latin America’s biggest electricity firm over to private control. With the deal, the government’s stake will go from 72 to around 45 percent.
Yes, but … As in other major companies that were privatized, the government will retain a “golden share,” meaning that it will have veto powers over strategic decisions.
Uphill battle. The move was a win for President Jair Bolsonaro and will be a solitary —...