Eletrobras president says he does not believe in renationalization in case of Lula’s victory

The president of Eletrobras, Wilson Ferreira Junior, said this Thursday (29) that he does not believe that a possible Lula (PT) government will try to renationalize the company, privatized in a capitalization operation that was the target of protests and judicial questioning by unions and the opposition. to the government of Jair Bolsonaro (PL).

In his first interview after returning to the command of the company, the executive argued that, in addition to the high cost of buying back shares, the improvement in the company’s investment capacity is of interest to the country.

“I don’t think there is any change, no,” he said. “The government has a relevant stake in the company, and I believe it is more interesting to have a stake in a company that invests in Brazil.”

In the privatization process, the government issued new shares to private investors, reducing its stake in the state-owned company to 29%. The lawsuit included a clause, known as the “poison pill”, which makes it difficult to regain majority position.

“If you want to take a step back, renationalize, it will cost. And, in the specific case of Eletrobras, the poison pill is almost three times the value traded on the stock exchange”, he claimed. “It makes no economic sense, the government has a fabulous fiscal challenge.”

Ferreira Junior said that Eletrobras has already started a process of revisiting its strategy, which includes five pillars of value creation: commercialization of energy in the free market, reduction of costs and expenses, growth perspective, reduction of liabilities and tax efficiency.

The paths to achieve these goals should begin to be detailed in November, when the company publishes the balance sheet for the third quarter. This Thursday, however, Ferreira Junior anticipated some decisions.

To reduce costs, a new voluntary redundancy plan will be launched in November, focusing on employees of retirement age. In the last years of state-owned company, also under the command of Ferreira Junior, the company reduced its staff from 26 thousand to less than 12 thousand people.

The company will also maintain its efforts to simplify its shareholding structure, which has four subsidiaries and participation in several energy generation and transmission projects across the country. The subsidiaries, however, will not be closed, said the Executive, due to their regional relevance.

Ferreira Junior says that the company should direct its growth strategy to the areas that are currently the focus of its activity: renewable energy generation and transmission. Government auctions should be the main path to growth, the shares should be majority.

“As of now, we are not a financial investor, so we have no interest in minority interests, whether equity interests or SPEs. [Sociedades de Propósito Específico]”, said the president of the former state.

Another focus is the migration to B3’s Novo Mercado, which improves financing conditions for companies. The process depends on the unification of the company’s two classes of shares and is expected to be completed in the first half of 2023.

The company and its board of directors will still discuss strategy before moving forward with the distribution of additional dividends, said Ferreira Junior. The trend is that in the first quarters investment is prioritized over shareholder remuneration.

The president of Eletrobras defends that, in his first visit to the company, he took on a company with great financial difficulties and billions of losses. Now, with its accounts up to date and free from state ties, it has greater investment capacity.

“Any government that will be designed will find a completely different company. An unleveraged company, with the possibility of placing itself as one of the most efficient, an example of governance, capacity to invest and meet the growth of Brazil”, he said.