SAO PAULO (Reuters) - Brazil’s state-controlled power company Eletrobras aims to settle U.S. class action lawsuits before it begins what is expected to be the country’s largest privatization in almost two decades, Chief Executive Wilson Ferreira Jr said on Wednesday.
Investors in the United States have sued Centrais Elétricas Brasileiras SA (Eletrobras) after the company reported large losses related to a sprawling corruption scandal in Brazil.
“Over the course of the lawsuits, settlement initiatives could arise, and we are willing to evaluate each one of them,” he told Reuters in an interview.
The company, which is on a list of assets the Brazilian government has decided to sell, says it has also been the victim of wrongdoing and that it is collaborating with U.S. prosecutors.
Ferreira said Eletrobras has held talks with the U.S. Department of Justice, the Securities and Exchanges Commission (SEC) and investors, but he declined to say whether the company would accept a deal that includes a cash payment.
The Brazilian government plans to privatize the company in the second half of the year in what is likely to be Brazil’s largest privatization in almost 20 years. New Eletrobras shares will be issued to investors in a transaction that will result in the government losing a majority stake.
Ferreira said the Brazilian government expects to eliminate some legal hurdles for the privatization in coming days.
The rules for the privatization are contained in a draft bill the government has sent to Congress. Investors fear lawmakers will make changes that could reduce interest in the firm, such as leaving some subsidiaries out of the privatization.
Congressman José Carlos Aleluia, from Bahia state, has insisted that subsidiary Chesf, which has a strong presence in the politically influential Northeast region, remain out of the privatization. Ferreira refuted that.
“There is no sense on that, these assets have synergies,” he said, adding that reaction against the bill was natural given the company’s long history in the public sector.
Ferreira, who was appointed Eletrobras CEO in 2016 after years in charge of power company CPFL Energia, said he would remain in the post if the new controlling shareholders ask him to after privatization.
Writing by Marcelo Teixeira; Editing by Chizu Nomiyama and Susan Thomas