To complete projects, Chesf wants to sell assets worth R$ 2 billion.
Chesf, a subsidiary of the federal state-owned company Eletrobras, operating mainly in the Northeast region of Brazil, intends to raise approximately R$ 2 billion through the sale of assets such as hydroelectric plants, wind farms, and transmission lines. The largest electricity company in Brazil in terms of installed capacity, Chesf has accumulated a large portfolio of generation and transmission projects in recent years, but has encountered difficulties in carrying out these projects, many of which are delayed or even paralyzed. "The objective is to eliminate this liability. We are not thinking about starting anything new... We have to use 2017, 2018, and even the beginning of 2019 to resolve this liability," stated the company's president, Sinval Gama.
Luciano Costa, Reuters - Chesf, a subsidiary of the federal state-owned company Eletrobras, operating mainly in the Northeast region, intends to raise around 2 billion reais through the sale of assets such as hydroelectric plants, wind farms and transmission lines, the company's new president, Sinval Gama, who took office last week, told Reuters on Thursday.
Chesf, the largest power company in Brazil in terms of installed capacity, has accumulated a broad portfolio of generation and transmission projects in recent years, but has encountered difficulties in carrying out these projects, many of which are delayed or even paralyzed.
Part of the proceeds from the sale of assets would be used to finance these ongoing projects, which the company expects to complete by early 2019.
But the company also hopes to negotiate the sale of some of the projects that have not yet started construction, reducing its list of ongoing projects.
"We're going to try to sell these projects, to relieve ourselves of the obligation to invest," Gama explained in an interview with Reuters.
"The goal is to eliminate this liability. We're not thinking about starting anything new... We have to use 2017, 2018, and even the beginning of 2019 to resolve this liability," he stated.
According to him, the state-owned company has a portfolio of ventures valued at 3,7 billion reais that could be sold, and these assets will be offered to investors until the company manages to raise the planned 2 billion reais.
"We're looking at everything from A to Z... but we'll sell the ones that give the best return. I have to start in 2017 because I already need the resources," the executive stated.
Chesf's intentions align with the planning of its parent company, Eletrobras, which last year announced targets for the period between 2017 and 2021 that include obtaining approximately 4,6 billion reais from the sale of assets to reduce debt.
VOLUNTARY RESIGNATIONS
Gama said that another measure Chesf will take to recover its financial health will be to implement a voluntary redundancy plan.
The state-owned company has approximately 4,5 employees, of which 1,8 are expected to be eligible for the plan.
"We will encourage employees to leave and we will restructure the organization, reducing the number of management levels... we will focus on efficiency and cost reduction," said Gama.
Eletrobras' overall plan includes incentivized retirement plans for up to nearly 5 employees.
According to Gama, Chesf currently has operating expenses exceeding its revenue, which will require restructuring so that the company can reinvest in the future.
The executive, who before taking over the leadership of Chesf was at the Goiás-based energy distributor Celg-D, also part of the Eletrobras group, stated that the appointment to the state-owned company's subsidiary in the Northeast was "an honor."
"It's a company I joined as an intern 40 years ago," he said.
Upon returning to Chesf, the executive aims to restore the company's financial health and complete the delayed projects, preparing it for a new cycle of expansion.
"I want to be able to start saying, 'Wow, Chesf is so strong... participating in auctions, growing sustainably...' That's the dream."