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Eletrobrás: The New Petrobras? – Analyst Blog
Zacks Market Commentaries (May 13th, 2009) Writes:
Centrais Eletricas Brasileiras SA, or Eletrobrás (EBR.B) is the biggest electric utility in Brazil, with operations in the generation and transmission of electricity. The company is 54% controlled by the Brazilian government, and that's where the problems begin.Eletrobras has a long tradition of political influence in its internal management and investment decisions -- a fact that makes investors skeptical on the company's outlook. Additionally there are some old unsolved problems, like the payment of a 10-years-retained dividend equivalent of R$9.4 billion(US$4.5 billion) that should be paid to investors, and the expiration of some important generation facilities concessions.According to the privatization program legislation dated 1995, the distribution and generation privatized facilities were granted to the private sector for 30 years, with the possibility of renovation. The companies that were not privatized, which is the case of Eletrobrás, got a renovation of the concession for 20 ...
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