Eletrobras: TCU Minister says he will ask for suspension of sale for 60 days

BRASILIA – The minister Vital do Regoof Federal Audit Court (TCU)said in an exclusive interview this Wednesday, 20, to the Estadão/Broadcastwhich will ask for a 60-day view (more time to analyze the process) of the privatization gives electrobrasin the trial that will start in a few hours at the Court of Auditors – the session starts at 2:30 pm.

“It is my obligation not to let the public patrimony be liquidated. They are carrying out liquidation”, criticized the minister in the interview. Vital do Rêgo said that it is up to him, as minister of the TCU, to “inspect every penny” of the privatization of the state-owned company, the most awaited by the government Jair Bolsonaro (PL). “As it is, they are not privatizing, they are liquidating, and it will be up to the TCU to certify or not”, repeated the TCU minister.

He also stated that he is not analyzing the merits of the sale of the company. “This is a decision of the government”, stressed the minister. Through the operation, the Union intends to reduce its share in the company from about 60% to 45%.

Vital’s view request will be put on trial. Jorge Oliveira, Bolsonaro’s nominee to the body, will vote to reduce the deadline to seven days, but must not be accompanied by the majority of the body. TCU sources interviewed by the report estimate that the order may take between 28 and 15 days, taking the auction to the month of July.

yesterday, the Estadão/Broadcast showed that, behind the scenes, a group of court ministers received information that behind the pressure to speed up the analysis of the operation there is a move to lower the price of the share.

Some TCU ministers received information that, even after the seven-day deadline, the preparation of the auction and the road show of the company’s share offering operation (which is part of the privatization model) would take more than a month. In this scenario, the deadline of May 13 for the sale would not be reached anyway, leaving the offer of shares for June.

The government claims that to take advantage of the market window and carry out the operation on May 13, it will be necessary for the TCU’s green light to occur no later than April 27. In this case, the visa application could not exceed seven days.

Rapporteur’s vote calls for changes to the ‘poison pill’

The rapporteur of the Eletrobras privatization process in the TCU, Aroldo Cedraz, made the vote available to the ministers only after 12:00 this Wednesday. Members of the Court state that, given the time, the request for a view to be presented by Vital do Rêgo is justifiable.

according to Estadão/Broadcast found, the vote made available to ministers is in line with suggestions from the technical area, but the minister suggests changes to the “poison pill” rule, which aims to protect the company against “hostile takeovers”. The mechanism prevents a shareholder that exceeds certain shareholding limits of 10% from being penalized with the obligation to carry out a public offer to acquire the shares of other shareholders for an amount up to three times higher than the highest historical price of shares in the market.

In the vote, which can still be changed until the moment of the trial, Cedraz understands that the clause goes against the Federal Constitution, since the mechanism would imply the imposition of a “disproportionate burden on the public power” if the government wants to regain control of the state-owned company. in the future.

Behind the scenes, a group of court ministers understands that this change, if approved, could make the government need to hold a new assembly, which would further delay privatization.

In addition, Cedraz also proposes that the TCU determine to the BNDES, responsible for the modeling, the use of the most adequate parameters for estimating generation revenues, essential to determine the value of Eletrobras shares to the market.

The minister also mentions in his vote that the TCU Secretariat presents an inspection proposal aimed at verifying the impact of the new legal and regulatory provisions on the power component of Eletrobras plants.

The subject was the subject of the first TCU ruling, which recommended that the government include a clause in the grant contracts providing for the possibility of paying additional grant bonuses based on the gains obtained with the future sale of power in the free market, where the values ​​and contracts are negotiated directly with generators.