Partially privatizes an electricity utilities State-owned company

21 Jun 2021

On 21 June 2021, the National Congress of Brazil approved new legislation allowing for a partial privatization of a State-owned enterprise from the energy sector.

The new legislation (entitled Provisional Measure No.1031/2021) mandates the partial privatization of EletroBras, currently the biggest electricity utilities company in Latin America. As a result of this operation, the Brazilian state’s stake in the company is expected to be reduced from approximately 61 per cent to 45 per cent.

The operation will be executed through the issuance of shares to be traded on the stock market, accounting for approximately 15% of the company's ownership. The new law dictates that the Government maintains a veto power against hostile takeovers and other strategic risks or threats.