Privatization of Eletrobras gains approval from Brazilian court of law

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(Bloomberg) — The Brazilian government has been given the go-ahead from accountants to privatize Centrais Eletricas Brasileiras SA or Eletrobras, the country’s largest power generation company.

The country’s audit office approved the sale by 7-1 on Wednesday, when it resumed deliberations after delaying its final decision by 20 days to give one of its members more time to evaluate the process. President Jair Bolsonaro’s government is looking to raise about 67 billion reais ($13.5 billion) for his majority stake in the company, which generates about 30% of all electricity in Brazil.

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The government is looking to sell the Eletrobras quickly, as market volatility could increase as the October presidential election approaches, potentially waning investor enthusiasm.

One of the members of the court, Vital do Rego, thought the price was too low and voted against the sale. According to his official agenda, Mining and Energy Minister Adolfo Sachsida has been touring all accounting firms in recent days and asking for support.

Read more: Risks to Eletrobras sale grow as court delays final approval

The Ministry of Mines and Energy wants to sell the government’s stake in the company between July and August. However, state development bank BNDES, which owns an 11% stake in the company, expressed reservations about the timing, saying this is typically a period of low liquidity.

Amid the fastest inflation in nearly two decades, some of Bolsonaro’s allies have called on the government to use some of the proceeds from the sale to subsidize electricity bills.

Read more: Inflation in Brazil hits highest since 2003 as food costs rise

Former President Luiz Inacio Lula da Silva, the frontrunner in the presidential race, has promised to cancel the sale if elected, or roll back if it has already happened.

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