Brazil Power Giant Axia Sets US$800M Share Redemption
BRAZIL · MARKETS
Key Facts
- —The country Brazil, Latin America’s largest economy; Axia holds 17% of its generating capacity.
- —What happened Axia’s board approved a fifth class C share redemption on Wednesday.
- —The numbers Up to 4 billion reais (about US$801 million) for 67.2 million shares.
- —For US investors Class C ADR holders get cash via Citibank, with no conversion option.
- —Key dates Record date Thursday, 8 October; payment on Monday, 26 October.
- —Still open Final cash depends on how many holders convert into common shares.
Axia Energia, the former Eletrobras, will pay shareholders up to about US$801 million to cancel part of a special share class.
Axia Energia, the Brazilian power company formerly known as Eletrobras, has approved a fifth Axia share redemption. US investors holding its class C depositary receipts will be cashed out automatically, with no option to swap into stock.
The board approved the payout of up to 4 billion reais (about US$801 million) on Wednesday, 7 October. The material fact, a mandatory investor notice filed with Brazil’s securities regulator, says it covers 67.2 million class C shares.
What Axia Approved
The redemption covers 67,249,496 class C shares, or 17.38% of that class, according to the filing. Axia pays 59.48 reais (about US$11.91) per share, the closing price of its common stock on Tuesday, 6 October.
Shareholders on record at the close of Thursday, 8 October, qualify for the payout. The class C shares trade ex-rights from Friday, 9 October, and payment is due on Monday, 26 October.
Holders who prefer to stay invested can swap the affected shares one-for-one into common stock instead. They must say so through their broker or the share registrar, Itaú Corretora, between 14 and 16 October.
Anyone who stays silent is redeemed automatically. New common shares from conversions will be delivered on Tuesday, 20 October, and fractions of shares are disregarded.
How the Class C Shares Work
Shareholders approved the class C preferred shares at an extraordinary meeting on 19 December 2025, according to an Axia investor presentation. Every shareholder then received about 0.263 class C shares for each share held.
The shares vote like common stock, earn the same dividends and carry full tag-along rights in a change of control. All of them must be redeemed or converted into common shares by 2031.
The redemption price is always the common stock’s closing price on the session before the board decision. Redeemed shares are cancelled, so each round returns cash and reduces the share count.
Axia tested the mechanism with a first round of 30 million reais (about US$6 million), announced in June. Larger second, third and fourth rounds followed, announced on 6 August, 3 September and 22 September.
In the fourth round, holders of 24.7 million shares chose conversion instead of cash. Axia pays 2.538 billion reais (about US$508 million) on Thursday, 8 October, against 3.9 billion reais (about US$781 million) announced.
Why the Axia Share Redemption Comes Now
Axia’s board has earmarked up to 11.7 billion reais (about US$2.34 billion) for class C redemptions this year. The budget is tied to first-quarter, second-quarter and partial second-half results.
After the fourth round, 5.392 billion reais (about US$1.08 billion) of that budget remained, the company said on 1 October. The company calls the budget a forecast, not a commitment, and each round needs its own board approval.
Axia reported adjusted net income of 1.608 billion reais (about US$322 million) for the second quarter. Net debt stood at 45.461 billion reais (about US$9.1 billion) at the end of June.
The company runs 44,430 megawatts of generating capacity, 17% of Brazil’s total, all from low-emission sources. It also has about 74,800 kilometres of transmission lines, including some held with partners, according to its second-quarter report.
Brazil’s federal government keeps one special golden share in the company. Conversions use the Central Bank of Brazil’s PTAX rate for 7 October, 4.99 reais per US dollar.
What It Means for You
Axia’s American depositary receipts, US-traded certificates for Brazilian shares, left the New York Stock Exchange after trading on 6 August. They now trade over the counter as AXIAY for common shares and AXICY for class C shares.
Holders of AXICY receipts cannot convert in the Axia share redemption, according to the filing. Citibank, the depositary bank, will collect the cash and pass it on within seven business days of 26 October.
Axia may withhold Brazilian income tax on any capital gain of non-resident shareholders, at rates from 15% to 25%. The gain is the redemption price minus the investor’s purchase cost.
Non-residents who want their cost counted must email proof to the company by 6 p.m. Brasília time on Thursday, 15 October. Without it, Axia will set their purchase cost at zero.
A 25% rate applies to non-residents who do not state where they are tax resident, the shareholder notice says. The receipts made up only 2.5% of Axia’s shareholder base when it decided to delist in April.
Axia also filed on 7 August to end its US Securities and Exchange Commission registration, expected to take effect 90 days later. After that filing, Axia said, it would publish the information US rules require on its investor website.
What Is Not Known
Axia has not said how many shareholders will convert, so the final cash outflow is unknown until after 16 October. In the fourth round, conversions cut the payout by about a third.
The filing does not explain how Brazilian tax withholding applies to payments routed to receipt holders through Citibank. Axia has not announced dates for any further rounds this year.
What Comes Next
The class C shares trade ex-rights from Friday, 9 October, and the conversion window runs from 14 to 16 October. In earlier rounds, Axia published the results in a market notice shortly after the window closed.
Cash reaches shareholders on São Paulo’s B3 exchange on Monday, 26 October, and receipt holders within seven business days after that. The Axia share redemption does not end the programme, because all remaining class C shares must go by 2031.
Frequently Asked Questions
What is Axia Energia?
Axia Energia is the Brazilian power generation and transmission company formerly called Eletrobras. Its shares trade on the B3 exchange in São Paulo as AXIA3 and AXIA7.
What are Axia’s class C shares?
They are redeemable preferred shares created in December 2025 and handed to all shareholders. They vote and earn dividends like common stock and must be redeemed or converted by 2031.
How much will Axia pay per share?
It pays 59.48 reais (about US$11.91) per class C share, equal to the common stock’s closing price on 6 October. The round totals up to 4 billion reais (about US$801 million).
Can US holders choose shares instead of cash?
Holders of the class C depositary receipts, traded over the counter as AXICY, cannot convert. Their underlying shares are redeemed, and Citibank passes on the cash.
Is Axia still listed in New York?
No. Its depositary receipts left the New York Stock Exchange after 6 August and now trade over the counter.
Sources: Axia material fact on the fifth class C redemption, 7 October 2026 (CVM); Axia shareholder notice on tax treatment, 7 October 2026; Axia notice on fourth-round results, 1 October 2026; Axia material fact on allocable capital, 25 September 2026; Axia presentation on class C shares, June 2026; Axia notice on NYSE delisting, 5 August 2026; Axia notice on OTC trading and Form 15F, 7 August 2026; Axia material fact on ADR delisting, 1 April 2026; Axia second-quarter 2026 results release; Central Bank of Brazil PTAX rate; Valor Econômico (all accessed 8 October 2026).
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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