Eletrobrás Proposes Major Capital Restructuring via Shareholder Vote

Centrais Elétricas Brasileiras - Eletrobrás US15234Q1085

Centrais Elétricas Brasileiras S.A. - Eletrobrás is seeking shareholder approval for a significant capital reorganization plan designed to strengthen its financial foundation. The Brazilian power utility intends to convert approximately 30 billion Brazilian Real from its profit reserves into share capital, a move requiring a green light from investors at an extraordinary general meeting scheduled for December 19.

Central to the proposal is a substantial bonus share issue for current investors. The company plans to distribute more than 606 million new Class C preferred shares as a stock dividend. Eligibility for this distribution extends to holders of both common shares and Class A or B preferred shares, with an allotment ratio of 0.2628378841074 new preferred shares for each existing share held. Provided the assembly grants approval, trading of these new securities is expected to commence on December 22. For tax assessment purposes, the value of each new share has been set at 49.44 Real.

In a parallel step to simplify its equity structure, Eletrobrás has finalized a buyback price for its remaining Class R preferred shares. These will be repurchased at 1.2994705188032 Real per share, offering liquidity and certainty to holders of this specific class. This action represents a continued effort to refine the company's capital framework following its recent privatization.

Awaiting Final Investor Approval

While the Board of Directors at AXIA Energia, Eletrobrás's controlling entity, has already endorsed the capital increase plan, the final decision rests with shareholders. The upcoming December 19 meeting is therefore a pivotal event for the firm's future financial architecture.

The proposed multi-billion Real capital injection constitutes a fundamental balance sheet adjustment for the energy giant. These measures reflect an ongoing strategy to optimize the corporate financial structure in the post-privatization era. Market observers will be monitoring the impact on key metrics, such as earnings per share, which will be influenced by the increased number of shares in circulation. All eyes are now on the shareholder vote later this month.