January 22, 2019 / 10:05 PM / 9 months ago

Eletrobras CEO says capital raise needed, format undetermined

SAO PAULO (Reuters) - Brazil’s new government will support state-run utility Centrais Eletricas Brasileiras SA (ELET6.SA) raising capital but whether that is through privatization or another format has not yet been determined, Chief Executive Wilson Ferreira said on Tuesday.

Ferreira told Reuters he has begun to discuss how to capitalize Eletrobras, as the company is known, with Mines and Energy Minister Bento Albuquerque, but not yet with Economy Minister Paulo Guedes or President Jair Bolsonaro.

Ferreira said the capital increase could be done this year.

Among the options are selling assets, outright privatization or issuing new shares that would dilute the stake of the state. The previous government tried that but was not able to get a bill authorizing the operation through Congress last year.

After the new government took office on Jan. 1, Minister Albuquerque said that the capitalization process will go ahead, but he has not given details.

“The decision on how to do this has not been taken yet. What is clear is that the capitalization is necessary, to increase the company’s capacity to invest,” Ferreira said.

But he said nothing has been decided on whether to take up the proposal sent to Congress or some other alternative or how much money can be raised from the capitalization.

The Economy Ministry will have to be brought into the discussion, he added.

Reporting by Luciano Costa; Editing by Christian Plumb and Lisa Shumaker

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