Eletrobras approves possible payment of Santo Antônio Energia

Eletrobras’ board of directors approved the payment, by its subsidiary Furnas, of all the shares of Madeira Energia —the parent company of Santo Antônio Energia— that may be left over after a capital increase that may not be accompanied by the other partners in the venture.

This Friday (27), the electric company republished its balance sheet for the first quarter, “in the context of the public offering of shares to be carried out by the Company”, to include a review of the independent auditor’s assessment in relation to Santo Antônio, alerting to possible default.

Santo Antônio Energia, which controls a hydroelectric plant of the same name on the Madeira River (RO), is expected to raise capital of around R$1.5 billion by the end of this month to face an unfavorable arbitration decision.

However, company partners may not follow the operation — Cemig, for example, has already declared to the market that it will not make the contribution corresponding to its 8.53% stake in Madeira Energia.

In addition to Cemig and Furnas —which hold the largest share of Madeira Energia’s capital, with 43.06%—, Novonor (formerly Odebrecht, with 18.25%), Caixa FIP Amazônia Energia (19.63% ) and SAAG (an Andrade Gutierrez vehicle, with 10.53%).

According to a statement from Eletrobras released on Thursday (26), holders of Furnas debentures will have to approve the capital increase in Madeira Energia. A meeting of debenture holders was scheduled for May 30th.

If this approval is not obtained, Eletrobras warned that the debt represented by the debentures must be declared overdue in advance, “which could have a material adverse effect on Furnas and the Company as a result of default or cross-acceleration or cross-default of your debts”.

In the quarterly information form (ITR) updated this Friday, Eletrobras points out that if it does not obtain the waivers, it may not be able to meet most of its payment obligations.

“Likewise, the Company believes that it will not have sufficient resources to pay off most of its debt if it becomes immediately due and due and to continue to implement its business plan, which would jeopardize its operations, financial condition and results of operations. “.

As of March 31, Furnas’ total debt was approximately R$7 billion, and Eletrobras’ consolidated debt was R$41.6 billion.

This month, the president of Eletrobras, Rodrigo Limp, commented that Eletrobras was analyzing “all scenarios” in relation to Santo Antônio Energia, “including that (other partners) do not make the contribution”.

“We wouldn’t know how to quantify what would happen in the eventual worst case scenario, but eventually I would have to negotiate with creditors,” Limp said at the time, adding that he saw no impact of this Santo Antônio operation on the company’s capitalization.