Eletrobras (ELET3; ELET6): Justice invalidates an injunction on Furnas and opens the way for company privatization

The chief justice of the Rio de Janeiro Court of Justice on Monday overturned an injunction suspending the holding of an association of bondholders in Furnas, a key step in the Eletrobras privatization process (ELET3;ELET6).

A meeting of bondholders at trading subsidiary Eletrobras over a capital increase in Madeira Energia, which controls the Santo Antônio hydroelectric plant, was suspended by an injunction issued Sunday in a lawsuit brought by the Furnas Employees Association (Asef).

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TJRJ Duty Judge, Isabel Teresa Pinto Coelho Deniz, Granting temporary urgent relief in light of The application which referred to a series of alleged wrongdoing committed by the company. Among them are breach of bond contract and breach of rules on deadlines.

The approval of this capital contribution is a condition for the implementation of the Eletrobras capitalization offer, which is scheduled to be priced on Thursday, the ninth.

In his decision, the President of TJ-RJ, Judge Henrique Carlos de Andrade Figueira, stated that the suspension of aggregation could cause “a significant impact on the planning of the Brazilian electricity sector, being able to compromise the reasonableness of the tariff and, consequently, the access of the most needy strata of the population to Basic electric power service.

He pointed out that “there is no doubt that maintaining the effectiveness of the decision of origin will lead to massive administrative and financial disruption, in addition to an abhorrent multiplier effect.”

(with Reuters and Estadão content)

Turn your FGTS into an investment: Use up to 50% of FGTS to invest in Eletrobras, the largest energy company in Latin America.

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