* Globo reported plan to split company into three
* Eletrobras says to keep existing subsidiaries
RIO DE JANEIRO Jan 25 Brazil's state-controlled
utility Centrais Eletricas Brasileiras SA, or Eletrobras
, on Friday denied a report that said the government
is studying a plan to break up the company as part of a
The O Globo newspaper on Friday reported that the plan
suggested Eletrobras' assets would be grouped into separate
electricity, generation, transmission and distribution
In a statement emailed to Reuters, an Eletrobras spokesman
said the company was ordered by the government to consider
options to cut costs, "taking advantage of synergies between its
"At no moment was the possibility of creating new holdings
for (energy) generation, transmission and distribution
contemplated," the company said.
Rio de Janeiro-based Eletrobras is expected to lose 8.7
billion reais ($4.3 billion) of revenue a year after agreeing to
a government plan to renew expiring hydroelectric dam
concessions in exchange for electricity rate cuts of between 18
percent and 32 percent starting this month.
To make up for these losses, Eletrobras expects to cut
operating costs and receive new revenue from giant hydroelectric
dams being built in Brazil's Amazon region, the paper said.
Eletrobras preferred shares, the company's most-traded class
of stock, have lost more than a quarter of their value since
early September when the government unveiled the rate-cut plan.
Eletrobras U.S.-traded shares fell 2.8 percent to $3.49 on
the New York Stock Exchange on Friday. They lost 67 percent last
year. Brazilian stock markets were closed for a Sao Paulo civic
If the split were to occur, Globo reported, the new
companies would probably absorb regional generation and
transmission units responsible for about 36 percent of the
electricity generation in the country.
Eletrobras denied that, saying that the government, its
controlling shareholder, had only asked the company to explore
cost cutting on the basis of finding synergies among its
Eletrobras said in December that it plans to release a
cost-cutting plan to investors by the end of March.