November 15, 2017 / 12:20 AM / 2 years ago

UPDATE 1-Brazil government mulls two-stage Eletrobras privatization: BNDES CEO

(Adds BNDES CEO comments on details of privatization models)

NEW YORK, Nov 14 (Reuters) - Brazilian development bank BNDES’s chief executive said on Tuesday that the government is considering a two-stage privatization of state-controlled power holding company Centrais Brasileiras SA.

Under a proposal the bank has developed, a private investor could buy a stake in Eletrobras - as the power holding company is known - in an initial phase of privatization and help the government improve its efficiency before control is transferred to the private sector entirely, Paulo Rabello de Castro told investors at an event in New York.

“In the first phase, we could give the investor management rights,” Rabello said.

BNDES has been tasked by the government with defining the privatization model.

Brazil’s government recently said that the privatization would take place through the issuance of new Eletrobras shares that would dilute the government’s existing stake to a minority position.

The bank is proposing that the company make at least two share offerings as part of the privatization process.

The final decision on whether the privatization model suggested by BNDES is carried out will be taken by Brazil President Michel Temer in the coming weeks, Rabello said.

After the president decides on the model, he said a bill will be drafted to be sent to Brazil’s Congress. Rabello said the government expects to have a draft of the bill by the end of December. (Reporting by Tatiana Bautzer; editing by Sandra Maler, G Crosse)

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