Eletrobras sells Eletronuclear to J&F; Batista brothers expand their influence

Eletrobras sold its stake in Eletronuclear to J&F Investments, eliminating a significant risk from its balance sheet in a transaction that strengthens the Batista family’s influence in the energy sector. The sale, involving 36% of common shares and 67% of total shares, was priced at R$ 535 million, catching the market by surprise. Analysts covering Eletrobras had previously assigned zero value to the asset. This transaction makes the Batista brothers minority partners of the Brazilian government, as the Eletronuclear remains under state control through ENBPar. The Brazilian Constitution currently mandates state control of nuclear companies. As part of the deal, J&F is also undertaking a commitment to provide financing of R$ 2.4 billion to Eletronuclear, specified in the agreement with the government earlier in the year. This responsibility increases the transaction’s value to nearly R$ 3 billion. Eletrobras had been guaranteeing the debts incurred by Eletronuclear for the construction of Angra 3, amounting to around R$ 8 billion. With this transaction, those guarantees will be released.