Published Tuesday, 20 October, 8:00 a.m. ET · Source: Axia Energia notice to shareholders
Key Facts
—The number R$3.48 billion (about US$691 million) for 59,264,305 class C preferred shares, 18.54% of the class.
—The price R$58.72 (about US$11.67) per share, the 19 October closing price of Axia’s ordinary shares.
—What changed Axia’s board approved the redemption on Tuesday, 20 October 2026; holders may convert into ordinary shares instead.
—Key dates Record date Wednesday, 21 October; conversion window Monday, 26 to Wednesday, 28 October; payment Friday, 6 November.
—For ADR holders Depositary receipts backed by these shares are redeemed automatically, with no conversion option.
—Not yet known How many holders will convert, and how the shares trade when the market reacts.
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Axia Energia, the Brazilian power company formerly known as Eletrobras, will redeem 59,264,305 class C preferred shares for R$3.48 billion (about US$691 million), its board decided on Tuesday, 20 October 2026. Holders receive R$58.72 (about US$11.67) per share, the closing price of Axia’s ordinary shares on Monday, 19 October.
Brazilian media reported the decision early on Tuesday morning ET, and holders of Axia’s depositary receipts are cashed out automatically with no option to convert. The payout is the latest in a run of redemptions that return profit to shareholders and a small part of the wider Brazil economy story.
What Axia Approved
The operation covers 18.54% of the class C shares, according to the company’s notice as reported by Estadão and Reuters. Shareholders on record at the close of Brazil’s B3 exchange on Wednesday, 21 October, qualify for the payout.
From Thursday, 22 October, the class C shares trade ex-rights, meaning new buyers no longer receive the cash. Payment is due on Friday, 6 November, and fractions of shares are ignored under Article 11, §10, item V of Axia’s bylaws.
We convert reais at R$5.03 per US dollar, the market rate on 20 October. Dollar amounts are rounded.
How the Redemption Works
Class C preferred shares, known as PNC shares, were created in December 2025, when Axia gave shareholders new shares as a bonus from its profit reserves. Reuters describes the redemptions as a kind of buyback programme, although they are a mandatory partial redemption priced at the ordinary share’s close.
Holders can instead convert some or all of the affected shares into ordinary shares, one for one. They must say so between Monday, 26 October and Wednesday, 28 October, and anyone who stays silent is redeemed automatically.
Holders of American depositary receipts, or ADRs, backed by class C shares get no conversion choice. Their shares are redeemed, and the depositary bank, Citibank, receives the cash and passes it on up to seven business days after the payment date.
Why Axia Keeps Redeeming Shares
This is not the first such payout. On 7 October the board approved a R$4 billion (about US$795 million) redemption at R$59.48 (about US$11.82) per share, which was reported as the company’s fifth redemption of class C shares.
Capital Aberto, a Brazilian business magazine, described the new shares in December 2025 as a way to distribute profit earned up to 2025 ahead of Brazil’s new dividend rules. Law 15,270 of November 2025 withholds 10% tax when a company pays an individual more than R$50,000 (about US$9,900) a month in dividends from 2026.
What It Means for US Readers
Dollar holders of Axia receipts do not need to act, because the redemption is automatic and the cash arrives through Citibank. Anyone holding the shares directly on B3 faces a real choice between cash and conversion.
The cash price is set at the ordinary share’s closing price and conversion is one for one, so the choice is between cash now and ordinary shares whose price will keep moving. Brazilian payouts are in reais, so their dollar value depends on the exchange rate, as our real-to-dollar guide explains.
For a wider view of how the São Paulo exchange trades, see our Brazil stock market guide. The presidential runoff on Sunday, 25 October could move both the real and B3 shares before the payment date.
What Is Not Known
- How many holders will convert, which decides how much cash Axia finally pays out of the R$3.48 billion ceiling.
- How Axia’s shares react when B3 trades on Tuesday and after the ex-rights date.
- Whether Axia links the redemptions to the dividend tax. The tax context above comes from Capital Aberto, not from the company.
- Whether another redemption follows. None has been announced.
What Comes Next
- Wednesday, 21 October: record date for the redemption.
- Thursday, 22 October: class C shares trade ex-rights.
- Monday, 26 to Wednesday, 28 October: holders choose conversion into ordinary shares.
- Friday, 6 November: redemption payment.
Sources
Estadão E-Investidor, Axia redemption · Reuters via Antena 1 · Capital Aberto, Axia share structure · The Rio Times, 7 October redemption
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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Frequently Asked Questions
What did Axia Energia decide?
Axia’s board approved the redemption of 59,264,305 class C preferred shares on Tuesday, 20 October 2026. The total is R$3.48 billion (about US$691 million), or 18.54% of the class.
How much will holders receive per share?
Holders receive R$58.72 (about US$11.67) per class C share. That is the closing price of Axia’s ordinary shares on 19 October.
Can shareholders convert instead of taking cash?
Yes, holders can convert some or all affected shares into ordinary shares, one for one, between 26 and 28 October. Holders who stay silent are redeemed automatically.
What happens to ADR holders?
Their class C shares are redeemed automatically, with no conversion option. Citibank, the depositary bank, receives the cash and passes it on up to seven business days after the payment date.