Definition of Furnas’ contribution to Santo Antônio is for June 6

There was a partial quorum at the meeting of debenture holders held this Monday (30) to evaluate a contribution by Furnas, a subsidiary of Eletrobras, to Madeira Energia, controller of the Santo Antônio hydroelectric plant, in Rondônia.

Calls were made from investors for two series of debentures. In the case of the first series, concentrated on large investors, there was a quorum and approval was given to the operation. It was necessary to gather 50% of the investors.

However, this quorum was not formed for the second, more dispersed series, and the definition was left for a new assembly, scheduled for June 6.

The contribution is important to continue the capitalization of Eletrobras, which will dilute the State’s share from 72% to 45%. The prospectus that deals with the operation determines that Furnas needs the green light from its debenture holders by the 6th; otherwise, the privatization of the state-owned company will be suspended.

The signal, however, is positive. As 33% of the investors in the second series were gathered, if this participation in the new meeting is maintained, it will be possible to hit the hammer in relation to the contribution. At the second meeting, the minimum quorum is 30%. Bradesco BBI is leading the process.

Furnas is a partner in Madeira Energia, with a 43% stake, and announced that it is preparing to take on a capitalization in the company, which needs to reach R$ 1.5 billion. This contribution will cover the costs of Santo Antônio’s defeat in an arbitration court.

To make this capitalization, however, the company needs approval from the holders of debentures issued by it in 2019.

Among the other shareholders of Madeira Energia, Cemig (which has an 8.53% stake) has announced that it will not join, while the others, Odebrecht (18.25%), renamed Novonor, the Caixa FIP Amazônia Energia (19 .63%) and SAAG Investimentos (10.53%), with the participation of Andrade Gutierrez, did not express interest in contributing with the contribution.

Therefore, once this capital injection is made, Furnas will take control of the company, reaching a 70% stake.

If Furnas is unable to meet all the financial requirements to comply with the arbitration award, a so-called cross default will occur — the execution of debts and guarantees of Furnas and Eletrobras. The risk of this occurring, however, is considered remote.

Eletrobras privatization began in the 1990s and suffered several mishaps

FHC (1995-2002): During the FHC government, the attempt to sell Eletrobras to the private sector began. The measure was resisted and did not materialize, but during his term, the president privatized almost all distributors, including Escelsa, a distributor in Espírito Santo, Light, in Rio de Janeiro, and Gerasul, which operated in the south. from the country

Lula (2003-2010): In addition to putting the plan to privatize the state-owned company on the shelf, the PT government curbed sales by distributors, but continued with transmission and power generation auctions. Among the initiatives that marked that moment are the start of wind energy auctions, in 2009, and that of the Belo Monte Power Plant, in 2010

Dilma (2011-2016): In six years in power, Dilma followed the guidelines adopted by Lula. Auctions were held for transmission lines and hydroelectric plants — such as Três Irmãos, in São Paulo

Temer (2016-2018): Two months after assuming the presidency, Temer resumes privatizations and cleans up one of Eletrobras’ biggest liabilities, selling loss-making state distributors that were under the umbrella of Eletrobras. There were six in all

Bolsonaro (2019-2022): In addition to bringing Eletrobras’ privatization plans to the fore again, Bolsonaro followed in Temer’s footsteps in the auctions of distributors, such as those of CEB (Companhia Energética de Brasília) and CEA (Companhia de Eletricidade do Amapá).