Eletrobras receives proposals from banks for sale for US $ 18,000 million

Eletrobras, the power company to be privatized, received proposals from 14 banks to coordinate what could be one of the largest share sales by a Brazilian company.

The company hired the local boutique investment bank Laplace Finance to help it recruit four global coordinators and a leading bank for the retail distribution of a public sale of voting shares that could reach 103 billion reais (US $ 18 billion), in which the Government intends to reduce its 45% stake, according to people familiar with the matter.

The banks can be selected as early as November, said the sources, who asked not to be identified as it was a private matter.

The Lower House of Brazil It approved a plan in June to privatize the power company, which will allow the economy ministry to raise funds to offset a drought-related rise in electricity prices as the economy tries to reopen. The proceeds from the privatization will be used to reduce consumers’ electricity bills by up to 7.4%, according to the economy ministry, with another part going to public development programs.

Laplace declined to comment, and Eletrobras did not respond to an email seeking comment.

The government plans to first sell new voting shares in a capital increase of about 23 billion reais early next year, according to the development bank. BNDES, who is organizing the sale.

Additional offers of the shares held by the government could be needed to reduce its stake to 45%, and sales volumes could reach more than 80 billion reais, it said. BNDES. The government plans to keep the so-called gold share, which gives it veto power in some decisions.

The transaction needs the approval of the Federal Court of Accounts, according to BNDES. The Government, including BNDES, owns 61% of the company’s total capital.

The deal was approved this week by a government committee and is moving forward even after a political crisis that erupted and affected markets, the people said. Two of the secretaries of Brazil’s economy ministry tendered their resignation this week after the government announced a plan to increase the basic income of the poor by exceeding a spending limit.