RIO DE JANEIRO (Reuters) - Brazil’s state-controlled utility Centrais Elétricas Brasileiras SA will soon announce agreements to sell minority stakes in projects such as wind farms and power transmission lines, Chief Executive Wilson Ferreira Jr told Reuters on Friday.
The CEO of Eletrobras, as Brazil’s largest utility is known, said there is strong interest from investors in all of the stakes it is selling in 77 projects in the country.
The asset sales are part of a plan implemented by Ferreira to raise cash and reduce the firm’s large debt of over 40 billion reais ($12.20 billion). It is taking place before a government strategy, announced in August, to sell its controlling stake in the company, in what Ferreira believes would be the largest privatization by value in Brazil’s history.
Eletrobras is the largest power company in Latin America. Its more than 200 power plants produce near one-third of the electricity used in Brazil, which it distributes through 70,000 km (43,500 miles) of transmission lines.
Ferreira believes the company could sell all the stakes in the 77 projects, possibly to partners in the ventures. “Considering the interest we’ve seen from our partners, we might sell the stakes to them directly,” he said.
Another part of Ferreira’s plans for the company refers to an employee buyout scheme launched to reduce its large workforce. He said the firm expects savings for 3.5 billion reais ($1.07 billion) per year starting in 2019 from the program. So far 2,100 people have left the company.
Before the expected privatization of the whole company, Eletrobras will be involved in another round of asset sales, as six of its power distribution companies in the northern part of Brazil will be offered to private investors early next year.
“I’ve been sought after by many people to discuss the auction of the distributors. The growth potential for those companies, considering the current base, is much larger than you would find in other firms,” he said.
Writing by Marcelo Teixeira; Editing by Meredith Mazzilli and Lisa Shumaker