THE National Congress resumed activities this Wednesday (2) after the end of the recess. Among the topics that should be debated throughout the legislative year is the privatization of some state-owned companies.
On the 28th, the Minister of Economy, Paulo Guedesdeclared during a press conference in which he released the results of the National Treasury that mail and electrobras would be “on the way to privatization”.
Guedes recalled that the Correios privatization agenda, for example, will be discussed again in the Federal Senate in February and that “must be approved”. The text to be considered authorizes the exploitation of all postal services by the private sector.
The privatization of Eletrobras is discussed in the Federal Audit Court (TCU). The green light for privatization is expected to come in February.
government expectations
Privatizing some state-owned companies was, from the beginning of the mandate, the government’s agenda. Bolsonarounder the management of Guedes in the Economy.
In an election year, it is likely that some of them will face resistance in the National Congress, which can avoid more sensitive issues when calculating the political risk that is embedded in certain decisions.
For economist Elena Landau, however, it is not impossible for privatizations to take place in 2022. She says that there is no “dogma” in this sense and recalls that former president Fernando Henrique Cardoso sold several state-owned companies in 1998, the year of election .
The biggest issue surrounding the topic is the way in which the government shows negotiation skills. Landau sees the sale of Eletrobras, for example, as a more likely possibility. In relation to the Post Office, however, even though the procedures are being followed, the situation is more delicate, mainly because it involves a large number of employees.
“There are a lot of employees, and you can’t, from one moment to the next, leave them to their fate. When you prepare to privatize, you carry out a voluntary dismissal plan, you make an agreement for reinsertion into the job market. In this case, it depends, yes, on the government’s ability to negotiate with the National Congress. I don’t think it has anything to do with the elections.”
She also says that there is a question of communicating, for example, and better explaining to the population what the project is about. “[A privatização dos] Postal services are more sensitive. The capillarity is very large, it reaches the whole of society, it has an affective value in people’s minds. It can create pressure.”
Eletrobras Case (ELET6)
Eletrobras’ privatization proposal was approved in June last year through a Provisional Measure (MP 1031/2021). Landau assesses, however, that this would not be the best way.
“The project exited [do papel] because of previously negotiated MP, full of benefits. THE The worst thing in the world is to carry out privatization by MP, because you are in the hands of Congress, because of the 120-day deadline to expire”. Now, the process needs the approval of the shareholders’ meeting and the judgment in the TCU.
On Wednesday afternoon (2), the newspaper Valor Econômico reported that a “gigantic” error in the grant calculation found in the technical studies could make the company’s capitalization unfeasible.
Ilan Arbetman, research analyst at Ativa Investimentos and specialist in the electricity sector, believes that, with the news, the topic can be dealt with more urgently. Still, “surely, there is nothing”.
“If Minister Vital do Rêgo shows the collegiate that there is, in fact, this glaring error in the accounts, you mess with the entire financial viability of the proposal. if this assumption that the data is incorrect will not proceed, that is, even if the TCU approves, we still have a relevant way to go”.
Arbetman highlights, for example, the race against time: the deadline for the process to be completed. “THE people have, yes, a certain fear on the part of parliamentarians to touch on issues that are so sensitive and whose consequences will be felt many years ahead. In fact, the market does not take this success for granted”.
“The government has a latent need to move forward with structural reforms. Back in 2018, Bolsonaro was elected proposing a liberal agenda that, for a number of reasons, including the pandemic, was not carried out with the desired speed,” he adds.
fall in papers
Eletrobras shares (ELET6) started to fall on Wednesday afternoon (2), after the information disclosed by Valor Econômico. At around 2:30 pm, the state-owned company’s shares retreated 2%, to R$ 33.19.
Arbetman highlights that the company’s role has a higher level of volatility than others in the electricity sector, and the advance of the capitalization process is extremely important for the “unlocking” of value.
“Whoever accepts a dose of risk, if the process goes ahead, can have greater gains than with other papers. The screen price, close to R$33, does not illustrate the potential of the action, much less if the capitalization process advances”.
Source: Moneytimes
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