October 8, 2019 / 2:51 AM / 12 days ago

Eletrobras looking at capitalizing Treasury advances

SAO PAULO, Oct 7 (Reuters) - Brazilian state-run utility Centrais Eletricas Brasileiras SA said on Monday it is discussing with the government capitalizing 3.9 billion reais ($950 million) in advances for future capital increases received from the Treasury in recent yeas.

If the operation is agreed to, those loans would become capital and be removed from the company’s debt load.

The proposal comes amid discussions between the management and government on the privatization of Latin America’s biggest power utility by way of new share issues. That would dilute the state’s stake in the company, a plan that has met with opposition from politicians.

Eletrobras said in a securities filing, however, that the management hasn’t taken a decision yet, which will require approval by the executive and the board. It would also need a decree issued by President Jair Bolsonaro.

“If and when that the operations goes ahead, shareholders will have preferential rights,” the company said in the filing.

$1 = 4.1063 reais Reporting by Roberto Samora Editing by Shri Navaratnam

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