what is needed to sell shares

In recent weeks, the copel (Companhia Paranaense de Energia) took new steps towards privatization. At the end of May, the company announced that it would start “working with market institutions” to structure a “potential public offering” of its shares. O Company’s Board of Directors also approved, last week, the forwarding to the extraordinary general meeting of a proposal for amendment of Copel’s by-laws to allow the sale of the shares.

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As a result, from a legal point of view, all that remains is for Copel to actually offer shares to the market in order for it to be privatized. It is still unclear, however, when this will happen..

In the last statement on the subject, the company stated that the offering “is subject, among other factors, to obtaining applicable approvals (including those of a corporate nature), to macroeconomic and market conditions in Brazil and abroad, to the execution of definitive contracts and the procedures inherent to the realization of public offerings in the form of current regulations”.

In April, Copel had to give explanations to the CVM (Securities and Exchange Commission) because of a newspaper report The State of S. Paulo which stated, among other points, that the offer is scheduled for October. At the time, the company said that there was no schedule for carrying out the operation.

wanted by People’s Gazettethe company stated that it only manifests itself on the subject through notices to the market.

Second Maíra MaldonadoSanitation and Energy analyst at Research da XP, the market expects the operation to be carried out in the last quarter of 2023that is, between October and December.

Inspection by the Court of Auditors

O TCE-PR (Paraná Court of Auditors) appointed a team to specifically oversee Copel’s privatization process. Bernardo Strobel Guimaraesdoctor in State Law and professor at PUCPR, explains that the government of Paraná does not need TCE approval to go ahead with the process.

“The Courts of Accounts may, in precautionary decisions, bar this type of operation, but the process does not require prior authorization. The TCE can also give an opinion on the regularity or irregularity of the procedure, give some recommendation. But the state of Paraná may proceed with the offer if there is no court decision barring the privatization“, it says.

Also according to Guimarães, privatization processes are “intensely judicialized” in Brazil. “But, historically, the Brazilian Judiciary has been very respectful in relation to technical decisions by the administration and tends not to review this type of process, except in cases of flagrant illegality”, he says.

In March, the TCU (Union Court of Auditors) filed a representation questioning the privatization. The authors of the request were opposition deputies to the government of Junior Mouse (PSD).

Other obstacles

The privatization of Copel was approved by Alep (Legislative Assembly of Paraná) and sanctioned by the governor at the end of last year. Since then, the Paraná government has gotten some problems out of the way.

In April, an ordinance by the Ministries of Mines and Energy and Finance set the value of the grant at R$3.72 billion for Copel to remain responsible for the hydroelectric plants of Salto Caxias, Secret It is Foz do Areia. Concessions did not end in 2023, but the government negotiated in advance so that there were no obstacles to privatization.

At the stf (Federal Supreme Court), the government obtained a majority to settle a debt with Banco Itaú through an agreement. The amount was contracted almost 23 years ago with the former Banestado, and had Copel shares as collateral. The agreement provides for a 62% discount in debt, which has a total amount of BRL 4.5 billion.

Government will cease to be a controlling shareholder

If the sale of shares is completed, Copel will be transformed into a corporation – which, in practice, means the privatization of the company. Today, the company is already a mixed capital company because it has the participation of private shareholders. With the transformation into a corporation, the state of Paraná, which currently owns 31.1% of the shareswill have a smaller share and will cease to be the controlling shareholder.

According to a material fact released by Copel in November, the government cannot hold less than 15% of the company’s total share capital and less than 10% of the total number of votes conferred by the shares that have voting rights.

In addition, the state will have a special class preferred stock, which gives veto power in deliberations on various matters. With the action, the state can veto, for example, the transfer of Copel’s headquarters to another state.