TCU assesses that privatization of Eletrobras distributors was advantageous

This Wednesday (13) the TCU (Union Court of Auditors) completed the monitoring of the privatization of six distributors that were controlled by Eletrobras and concluded that the process was advantageous, although it resulted in high costs and transfer of billions of debts by the former – state power.

Eletrobras sold all its distributors that were causing great losses to the company, in auctions that took place between July and December 2018.

The Piauí and Alagoas concessionaires were acquired by Equatorial Energia; the companies in Acre and Rondônia, through Energisa; and the distributors in Roraima and Amazonas, through Oliveira Energia.

According to the TCU, the privatization process led to expenditures of R$ 24.135 million (including BNDES remuneration), which were absorbed by Eletrobras. Revenues from asset sales reached only R$300,000, as the companies were acquired for the minimum amounts of around R$45,000 each.

The only one of the six companies that had positive enterprise value was Cepisa, for which Energisa paid a grant bonus of R$95 million to the Federal Government.

As foreseen in the sale process, Eletrobras had to assume debts of these companies in the order of R$ 11.24 billion, the most critical case being that of Amazonas Energia, which corresponds to 79% of this amount.

The TCU ruling points out that, even with the assumption of liabilities and expenditures that exceeded revenues, the results of the privatization process were advantageous, as they resulted in granting bonuses to the Federal Government and in the continuity of the provision of services in isolated locations.

In addition, the sales allowed new companies to reverse the situation of continuous devaluation of these distributors, which resulted in recurring operating losses. By purchasing the concessionaires at auction, the new owners assumed a total immediate investment of R$ 2.41 billion.

The privatization of Eletrobras was concluded in June this year. Workers were able to invest in the FGTS (Fundo de Garantia do Tempo de Serviço).