Eletrobras shares experienced a significant increase following reports of progress in negotiations with the Brazilian government.
The discussions aim to enhance the government’s representation on the company’s board, proposing an increase from two to three representatives out of ten total board members.
This adjustment would allow for greater influence from the government. Currently, the government holds about 40% of Eletrobras shares but has limited voting rights capped at 10%.
The negotiations also involve Eletrobras maintaining its role as a shareholder and guarantor for Eletronuclear‘s R$ 6 ($1) billion debt. However, the company would not be required to invest further. This is contingent on the government’s decision to complete the Angra 3 nuclear project.
Both parties plan to seek a buyer for the government’s stake in the former state-owned enterprise. In exchange for these concessions, the government would withdraw a direct action of unconstitutionality it filed against Eletrobras.
This action challenged the company’s privatization. The Supreme Federal Court has been involved, with Justice Nunes Marques encouraging reconciliation between the two sides.
On Thursday morning, Eletrobras shares (ELET3) saw a notable revaluation. By around 11:30 AM, ordinary shares were up by 5.79%, trading at R$ 37.08, while preferred shares increased by 5.83%, reaching R$ 41.54.
During this period, trading volume peaked at R$ 404.3 million, marking it as one of the busiest sessions for Eletrobras in recent times.
This surge in share price reflects investor optimism regarding the potential resolution of ongoing disputes. It also signals a clearer path forward for Eletrobras amid its evolving relationship with the government.