Nassif: Eletrobras privatization will be the biggest shady deal in history.
Journalist Luis Nassif warns of how much Brazil will lose with the privatization of Eletrobras, proposed by Michel Temer; "The privatization of Eletrobras will be the biggest privatization deal in Brazilian history, bigger than Vale and the telecommunications companies. Who represents the public interest in this process if the seller and the buyer are on the same side? Sector experts are appalled by the recklessness and lack of debate with which this mega-process is being conducted," he states.
247 - Journalist Luis Nassif stated this Monday, the 13th, that the privatization of Eletrobras by Michel Temer's government will be the "biggest shady deal in history."
Nassif says that the calculations and projections presented to assess the price are based on the book values of the assets and liabilities on the balance sheet. "This is a monumental deception, a methodology that 3G – which prepared the studies – has never used in any merger and acquisition process on the market, because it has no value whatsoever. What has always mattered is the projection of results, adjusted for factors such as risk and stock volatility," he says.
"The deception lies in the fact that Eletrobras has 184 power plants and produces 42.000 MW of energy. And the value of the concessions is not included in its balance sheet. For comparison, the São Simão plant, owned by CEMIG, an older plant with 1.710 MW of installed capacity, had a concession sold three months ago for R$ 7,1 billion. This value was not in any balance sheet. By a simple rule of three, Eletrobras' concessions alone should be worth R$ 289 billion. These values are not included in the projections of the privatization value. As if they don't exist economically," adds Nassif.
The journalist from Jornal GGN also says that Iberdrola, the second largest electricity company in Spain, has a market value equivalent to R$ 138 billion, compared to R$ 12 to 15 billion for Eletrobras. "The privatization of Eletrobras will be the biggest privatization deal in Brazilian history, bigger than Vale and the telecommunications companies. Who represents the public interest in this process if the seller and the buyer are on the same side? Sector experts are astonished by the recklessness and lack of debate with which this mega-process is being conducted," he states.
"Once privatization is complete, in addition to the monumental blow to public finances, it will compromise the balance of the energy market and future investments in energy integration in Latin America," says Nassif.
Read the full article at GGN newspaper.