GOVERNMENT-OWNED COMPANY    ECONOMY

SUPER ELETROBRAS IS COMING

R$ 5.9 BILLIONS is the additional amount the company must invest in new power plant in the 2008 budget.

The government intends to change the government-owned company in a giant. The plan foresees new power plants inside and outside the country, thus creating a company as valuable as Petrobrás. Will it be achieved?
Adriana Nicacio

The engineer José Antônio Muniz, from the State of Maranhão, took office at Eletrobrás on March 10th, after a political war where Senator José Sarney and Minister Dilma Rousseff were in opposite sides. Sarney won and appointed Muniz, his friend for 45 years, to the company’s command, a company giant only in its name.

Although it seems the domestic electrical sector owner, Eletrobrás is divided into several subsidiaries both in the generation and distribution. This history started to change just a few days after he took office when Senate promulgate the Provisional Measure 396, open the space to important changes. The governed-owned company will not be included on primary surplus, should be the majority partner in new power plants, will be free to invest outside the country and also contract debts. Shy, Muniz spoke on the Super Eletrobrás creation - and the market liked the idea. It was a simple statement, the stocks had 8% increase and I retreated,” he said to DINHEIRO. Well, this technician, in his first exclusive interview, who has dedicated all his live to the electrical sector has decided to detail his plan. “We will transform Eletrobrás into a Petrobrás, by following everything they did”.

This is an ambitious project as seeks to transform the ugly duckling among Brazilian governed-owned company into a swan, as Petrobrás. Holding the pencil, Muniz ensure the new law increases the company power fire. If Eletrobras budget formerly was included in the surplus calculation, this year the governed-owned company will be more R$ 5.9 millions to spend: Moreover, the issue of new Eletrobrás shares is being studied in order to raise funds. Free from the current chains, Eletrobrás will perform two bi-national electric power plant tenders in Bolivia and one in Argentina. In addition, the company plans to invest in alternative energy, such as small gas centers, thermal plants supplied with the sugarcane bagasse, and wind power plant. “We are interested in the nuclear program and will restart Angra 3 in addition to other units”, explains Muniz. He rejects also the nationalizing defender label. “We will be the majority, but there is space for the private sector”.

Expecting to become a company similar to Petrobrás, Eletrobrás will contract the international consultancy to prepare its strategic plan. This will be compatible with the Sarbanes Oxley American law. Another measure intended to increase its value in the Stock Exchange is to pay around R$ 7 billions regarding the dividends in arrears. The financing director Astrogildo Quental, during the lecture to the market analysts in Rio de Janeiro, affirmed they will pay in this year yet. However, this does not include the pending litigation which could be higher. The Rio Grande do Sul lawyer, Édison Siqueira, saying he represents US$ 5 billion credits, has called the Debentures holders meeting in Rio de Janeiro a couple of days ago and sent the denouncement to the Attorney’s General Office – the governed-owned company, however, does not recognize the debt. “This case is being denounced to the Brazilian Justice as well as the American authorities”, said Siqueira to DINHEIRO.

The company’s new president, for sure, will have several challenges ahead, including eventual legal skeleton. The other will be to unify the electrical sector stocks in the Stock Exchange - if upon Muniz opinion, only Eletrobrás will be negotiated.  The market follows the changes with attention also cautiously. “Eletrobrás still is the black box and this explains papers low value”, explains an analyst from a big investment bank, which preferred not to be identified: “It still is a very complicated company”, says Wagner Faccini, partner of Generação Futura brokerage company. In the reports distributed to the investors, Citibank and Credit Suisse analysts seems sceptical. They informed a risk exists that Eletrobrás is used by Federal Government to invest in investments with low rate return, and recommend the sale of the securities. Therein lays the fear of the political use, one of Eletrobrás challenges. Such fact Petrobrás could leave behind when its management became professional. “We will overcome the prejudice and transform Eletrobrás in a big company”, says the Minister of Mines and Energy, Édison Lobão.

Other important point is the electric power concessions renewal. Such fact has undermined the Companhia Energética de São Paulo (Cesp) auction. Having no guarantees, no company has participated in the tender. “Natural”, says Muniz. ‘It could be singular if there was a purchase.” This problem is not only related to São Paulo. The 670 power plants concessions have the maturity date from 2011 up to 2015. 

“The National Council of Energy Policy will create a work group to propose new criteria”, explains the Minister Edison Lobão. Although everything points to the concessions renewal. As several among them as Xingó and Paulo Afonso belong to such new Super Eletrobrás.

“I WILL COPY PETROBRÁS”
José Antônio Muniz reveals the plans to Eletrobrás in this first interview.

DINHEIRO – Which will be the first change:
JOSÉ ANTÔNIO MUNIZ – We will unify the five distributors’ management which are controlled by Eletrobrás and present losses. The president of Compania Energética do Piauí, Alagoas, Acre, Rondônia and Manaus Energia will be only one, of Eletrobrás.

What about the others controlled plants such as Furnas, Chesf and Eletronorte?
Eletrobrás will operate as the holding and only it will have the stocks in the Stock Exchange.

Which changes shall be expected?
A strategic planning will be performed. And concepts such as corporative governance and statutory changes will be adopted. Therefore, we will hire an international-standard and specialized company, as Petrobrás did.

Does the provisional measure give such power to Eletrobrás? To become a Petrobrás?
Due to it we could increase our market share, as we are released from the primary surplus. We will invest on the bi-national hydroelectric plant, nuclear plants and small power plants which will be environmentally feasible for the Amazon region. Also the electric system losses reduction, nowadays around 30%, will be sought.

What about the next investments?
We have Jirau, in Madeira River, the transmission system connected to the Madeira river power plants; we have a transmission system in Tucuruí, Manaus. We have power plants in Parnaíba. We are focused in such enterprises in the short term. All changes have only one purpose: guarantee the energy in order to maintain the production level. With the moderateness. What is it? It is the rate proper to the consumer. It is not the lower rate, the free rate, the non-expensive rate. It is the best rate.

Is it a nationalizing plan?
No. We will grow and space exists for the private sector.