Eletrobrás tells investors that its criminal privatization can be undone.

247 - Eletrobrás informed investors who buy its shares traded in the United States that its privatization is being challenged in Brazil and could be reversed by the government of President Lula (PT). The information was registered by the company in its 2022 fiscal year 20F form, released this Thursday (20) to regulatory bodies in Brazil and the US, according to the newspaper Valor Econômico. In March, In an interview with TV 247, President Lula described the privatization of the company as a "crime against the nation."

Eletrobrás, responsible for electricity generation and transmission, was the only major state-owned company privatized during Jair Bolsonaro's (PL) government. In June 2022, a capital increase diluted the Union's majority stake in the company. In its filing, Eletrobrás reported that 23 lawsuits are underway challenging the privatization model adopted and formalized at the São Paulo Stock Exchange, in Bolsonaro's presence.

The company acknowledged that there is a risk that the courts could invalidate the privatization, generating adverse legal and reputational effects, as well as affecting its risk rating and the value of its shares and corresponding securities traded in the US. The document states that "if the president is successful in challenging these provisions, the Brazilian government may attempt to regain control over us, which could lead us to reverse the privatization to become a state-owned company again for legal purposes, with the consequent implications."

The company also noted that President Lula has publicly spoken out against privatization and requested the Attorney General's Office (AGU) to conduct studies on the legal basis for challenging provisions in the company's bylaws that limit the exercise of voting rights by shareholders to 10% of the capital, regardless of the number of shares held.