Eletrobras: Recording shows organization of the board – 06/11/2023 – Market

The manager 3G Radar is a minority of Eletrobras with 1.3% of the total capital. Position is irrelevant as far as decision-making power is concerned. It owns 0.05% of the common shares, which give voting rights. It stands out in terms of access to results, with 10.88% of preferred shares, which have priority to receive dividends.

However, the recording of an internal meeting, obtained by Sheetmakes clear the manager’s ability to occupy positions on the company’s board of directors, which defines the board of directors and outlines strategies.

Any shareholder or group of shareholders may suggest a slate to be evaluated at a meeting. What stands out in this case is that of the 9 directors, 3 said they were invited to the position by a shareholder of 3G Radar, the founding partner of the management company Pedro Batista de Lima Filho, who also became a director after the privatization, appointed by the preferred shareholders.

3G Radar also states that “all appointments for the composition of Eletrobras’ board were made in common agreement between the board members, as mandated by the company’s governance practices”.

The manager was founded in 2013 by Batista and Mario Cunha Campos. Batista had made a career at Pactual and UBS banks, in addition to having participated in the creation of the management company Vinci Partners. In the new venture, they had 3G Capital Partners as a partner, from the trio of entrepreneurs Jorge Paulo Lemann, Marcel Telles and Carlos Alberto Sicupira.

3G Radar’s most recent reference form, from 2022, highlights that its controlling block includes Batista, Campos and 3G Capital. In note to SheetRadar’s investor relations area reported having 15 partners, and 3G Capital is a minority that does not participate in decision-making.

The trio ceased to be partners at 3G Capital in June last year, but remain among the investors, according to advisors for the businessmen.

Batista is known and respected as a technical energy analyst who went beyond the numbers. He learned how businesses work. He is a dedicated scholar. Friends say he’s the type that goes to the beach and takes him to read some new regulations from the National Electric Energy Agency.

The assessment is that because he has one foot in the financial market and the other in the energy sector, he knows what investors want from Eletrobras. He is appointed as a “planilheiro” director of the company because he wants to understand every comma of each decision. He puts pressure on results.

In Brasilia, he is appointed as an active player in privatization since the government of Michel Temer (MDB) began to evaluate the sale of the state-owned company. 3G Radar produced analyzes and projections on the subject. At the Eletrobras meeting reproduced in the recording, Batista said that he spent years studying the company.

“3G completes ten years in 2023, and we have been shareholders of Eletrobras for ten years. It was one of the first shares that we bought, and in 2013 it was a very complicated moment for Eletrobras”, he reminded those present.

“But we had a very clear vision of the company’s value, we knew the problems and risks. And why did we know that? Since 1997, I discovered that there is no way for us to understand the electricity sector without understanding Eletrobras, given the relevance of this company to the electricity sector [..] I have studied Eletrobras since 1997 and only invested in 2013.”

The meeting took place on January 26 and was convened to present the directors to the company’s managers and provide guidance on the directions for restructuring after privatization.

Counselor and consultant Vicente Falconi, for example, commented that he had experience in many councils, and the work was more challenging where he found problems to solve. To illustrate his point of view, he made an analogy between the Ambev brewery and post-privatization Eletrobras.

“I stayed on Brahma’s board, and then on Ambev’s, for 25 years. So, I took Brahma’s board at the beginning, and it was a board, like, very similar to our current one”, he said.

“That is, there were three bankers who bought a beverage company, although they didn’t understand anything, and we started to organize the company, to put some people inside. So, the emphasis, in the first years of that council, was to solve problems. Big problems from the company. Same thing here today.”

Falconi said he had already withdrawn from the company. He served as advisor from April 2019 to April 2021, and resigned in 2020. However, he said Batista called him.

“Actually I had already left the game, you know? For me, it was over. I hung up my boot. I was in the dressing room,” he said. “But Pedro appeared there. ‘Falconi, let’s go back to the game there. Play another ten minutes here’.”

Felipe Vilela Dias, on the board since April 2019, also credits Batista with joining Eletrobras.
After ten years at Squadra Investimentos, I wanted new challenges. He narrated the stressful departure as a director in another company and how the invitation to Eletrobras came about.

“I was already friends with Pedro, we lived together at the market. And he said: ‘Man, you’re getting out of a situation, but I’m going to put you in another one. audit, which is a heavy business’. Audit committee is always heavy”, said Dias at the meeting.

The chairman of the Board, Ivan Monteiro, said that he had only seen Batista once in his life, but that he received a call from him on the day that the capitalization had been approved. Monteiro made a career at Banco do Brasil and was president of Petrobras. In the electric energy area, he worked on the boards of CPFL and Light. They scheduled to talk for the night.

“We went to dinner. He is the author of the phrase. ‘I’d like to invite you to a project for the next ten years.’ I loved it. I’m definitely not a sprinter. I’m a marathon runner. The conversation was extremely pleasant. He mentioned some names. There we started to plan Wilson’s kidnapping”, said Monteiro.

Wilson Ferreira Jr. he had been president of the same Eletrobras from 2016 to 2021 and was at Vibra. He rejoined the company in September 2022.

3G Radar also nominated Elvira Baracuhy Presta. She joined the board in 2018 as a representative for minorities. She is now Executive Vice President of Finance and Investor Relations.

Days before the capitalization was approved in the Senate, on June 17, 2022, a group of investors in Eletrobras, of which Batista was a member, was received by the then Minister of Mines and Energy, Adolfo Sachsida. The meeting was recorded in the official agenda. The group took the list of executives from the proposed list to compose the new council. The list was also presented at the Ministry of Economy.

On August 5, 2022, the Extraordinary General Meeting of Shareholders approved and elected the slate, which has been working intensely. It has already held 39 meetings.

One of the challenges is dealing with the Direct Action of Unconstitutionality filed by the Attorney General’s Office at the Federal Supreme Court. The government of Luiz Inácio Lula da Silva (PT) insists that the Union regain voting power proportional to its stake in the company.

Directors were elected at the General Shareholders’ Meeting, says Eletrobras

Eletrobras’ press office said in a note that the meeting on January 26 took place in a hybrid model and was accompanied by 230 managers within the total transparency that is part of the company’s principles.

He also pointed out that the names appointed to the board of directors met the requirements set forth in the Bylaws and in the Nomination Regulations, were evaluated by the Personnel, Eligibility, Succession and Compensation Committee, responsible for verifying whether the candidates meet the required eligibility requirements. Finally, they were elected at the General Shareholders’ Meeting.

The note recalls that Eletrobras is managed by the “corporation” model, that is, there are no controlling shareholders of the capital. It is prohibited for any shareholder or group of shareholders to exercise voting rights with more than 10% of the shares entitled to vote, regardless of their participation in the share capital.

“All the company’s relevant decisions must be approved by a majority of the board, precisely to prevent a given shareholder from having greater interference in the company’s affairs,” stated the text.

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WHO ARE THE DIRECTORS OF ELETROBRAS

Chapa officially presented by 3G Radar, SPX, Vinci Equities, XP, and Banco Clássico, who together own about 5% of Eletrobras, and elected at the shareholders’ meeting

Ivan Monteiro
Former president of Petrobras, former director of CPFL and Light
New statement; 3G Radar

Pedro Batista de Lima Filho
Co-founder of 3G Radar
New statement; elected separately by nomination of the preferred

Vicente Falconi Campos
Consultant specialized in management, 25 years member of Ambev
Returned to the company, after being a director from April 2019 to July 2020, when he resigned; 3G Radar

Felipe Vilela Dias
Partner at Visagio Consultoria and former partner at Squadra Investimentos
Reconducted; advisor since April 2019; 3G Radar

Daniel Alves Ferreira
Lawyer, former board member at Cemig
Reconducted; was a counselor since April 2019; Classic Bank

Marcelo Gasparino da Silva
Lawyer specializing in governance with more than 30 terms as an independent director
He returned to the company: he was on the board between 2012 and 2014 and in 2016; Future Generation

Marisete Dadald Pereira
former executive secretary of the Ministry of Mines and Energy
New statement; Unity

Marcelo de Siqueira Freitas
Former Federal Attorney at the Attorney General’s Office from 2008 to 2015
Reconducted; counselor since April 2019; Unity

Carlos Eduardo Rodrigues Pereira
Engineer, Eletrobras employee since 2010
On counselor since April 2021; workers nominee
Workers’ chair will be extinct in 2024

He had been nominated and elected, but did not appear:

Carlos Augusto Leone Piani
Former Chairman of the Board of Equatorial Energia and former Director of Light
He was elected chairman of the board of Equatorial Energia on April 28, 2023

Octavio Cortes Pereira Lopes
Former Cemar before being consolidated as Equatorial Energia
He was elected president of Light on August 15, 2022