Privatization of Eletrobras' distribution companies begins in the second quarter of 2017.

BRASILIA (Reuters) - Eletrobras intends to begin privatizing six energy distribution companies in the North and Northeast regions that are under its control in the second quarter of next year, in a process that will extend until the end of 2017, said the new president of the state-owned company, Wilson Ferreira Jr., on Wednesday.

Last week, the holding company's shareholders approved the sale of the companies by the end of 2017, provided they receive funds to maintain operations and make investments until the auctions. The funds should come from funds in the electricity sector.

The companies that will be privatized are the distributors Cepisa (Piauí), Ceal (Alagoas), Eletroacre, Ceron (Rondônia), Boa Vista Energia (Roraima) and Amazonas Energia.

When questioned by journalists after his inauguration about the potential sale of Eletrobras' stakes in Special Purpose Entities (SPEs) in the generation and transmission sectors, a possibility already mentioned by other members of the government, Ferreira Jr. was cautious.

He said that, for now, "the decision to sell assets only applies to the distributors."

According to him, any potential sales of stakes in Special Purpose Entities (SPEs) will have to be carefully analyzed, because there are projects underway or about to start operating that could help generate cash for the group.

The executive said that no extraordinary tariff adjustment will be necessary to rebalance the accounts of the distributors that will be privatized, but that they will have ordinary adjustments that will help them improve their economic and financial performance, "a necessary condition for making a good sale," he emphasized.

(By Leonardo Goy)