Eletrobras approved a program that allows the company to buy back up to 202,111,946 common shares and up to 27,552,681 preferred B shares, which represents 10% of the total outstanding on the Brazilian stock exchange (B3). All operations will be carried out at market price. The maximum period for completion is 18 months, ending on July 2, 2024.
The details of the measure are contained in a statement to investors published yesterday (3). After the announcement, the company’s shares rose today (4). Around 4 pm, ELET3 was up 3.24%, while ELET6 was up 2.66%.
The program provides that the repurchased shares are later cancelled, sold or held in treasury, without reducing the share capital. According to the communiqué, the objective is to “increase shareholder value through the efficient use of available cash resources, optimizing capital allocation”.
Eletrobras also informs that the members of the Board of Directors considered that the current financial situation is compatible with the execution of the program and that there will be no prejudice to the fulfillment of obligations assumed with creditors or shareholders in the short term. He also added that the repurchase will only be carried out if there are resources available.
Also according to the announcement, treasury shares may be used to meet the Compensation Plans Based on Stock Options and Compensation Based on Restricted Shares, approved at the general meeting. They can also be used “to settle obligations arising from its liabilities related to lawsuits that discuss the difference in monetary correction of Compulsory Energy Loan (ECE) credits or the constitutionality of the tax”.
Created in 1962 to coordinate companies in the electricity sector, Eletrobras is a publicly traded mixed economy company.
Although it has been recording annual net profits since 2018, then-president Jair Bolsonaro included the company in the National Privatization Program developed during his term, claiming that the measure would enable the company to improve its investment capacity and contribute to the development of the Brazilian energy sector.
Last year, issued actions that reduced the Union’s participation in the voting capital to less than half
