* Zimmermann rules out extending aid to Eletrobras
* Tells Valor company agreed to new license terms
* Comes as shares sink to lowest since July 1994
SAO PAULO, Nov 23 Brazil's government ruled out
injecting fresh capital into Centrais Elétricas Brasileiras SA
after shares in the nation's largest power holding
utility fell this week to their lowest level in more than 18
years, a local newspaper reported on Friday, citing a senior
Neither the drop in shares of Eletrobras, as the company is
known, nor an expected tumble in revenue expected for next year
hindered the company's finances, Valor Econômico said, citing
Marcio Zimmermann, the No. 2 official at Brazil's Mines and
Eletrobras' most widelytraded class of shares lost a fifth
of their value on Wednesday, their biggest one-day decline, on
expectation that a hydro dam concession renewal plan and related
power-rate cuts will slash revenue, profit and investment for
the years to come. Shares in the Rio de Janeiro-based company
have fallen for 11 of the past 12 sessions.
"The National Treasury will not pour in any money.
Eletrobras won't turn into a dependent company," Zimmermann told
Valor. "What it will do is look out for good business
opportunities and, with that, investors will be lured."
Zimmermann's remarks underscore the risks facing Eletrobras
as a result of President Dilma Rousseff's plan to slash electric
rates by more than 20 percent, an initiative meant to boost
economic growth. The plan is likely to spark a 30 percent drop
in revenue at Eletrobras next year, Barclays analysts led by
Francisco Navarrete recently said in a client note.
A spokesman for the ministry in Brasilia did not have an
immediate confirmation of Zimmermann's comments to Valor.
Eletrobras fell 6.9 percent on Thursday. The stock is down
60 percent since Rousseff announced the plan late in August.
In the interview with Valor, Zimmermann denied allegations
that the federal government, Eletrobras' controlling
shareholder, forced Eletrobras to immediately renew
hydroelectric dam and power transmission concessions expiring
between 2015 and 2017 in exchange for lower power rates, Valor
said. Shareholders will meet on Dec. 3 to decide on the matter.
"Eletrobras evaluated the situation and elaborated a study
that was presented to the board," Zimmermann added. "The
analysis showed that, considered the net present value of
expected revenues, there were benefits if the company renewed
its licenses now."
Other power companies with concessions expiring between 2015
and 2017 have threatened not to accept the government's terms
and say they will continue to charge higher prices in the near
term, making it harder for the government to fulfill its promise
of cheaper electricity starting next year.