The Federal Court (STF) decided, by majority, to fully approve the agreement concluded between the union and the company Axia (formerly Eletrobras) aimed, among other things, at increasing the participation of the federal government in the company’s board of directors. The trial ended this Thursday with the vote of Minister Luiz Fux, who approved the complete consolidation of the agreement.
The majority of ministers followed the vote of the rapporteur, Nunes Marques, who was followed, in addition to Fux, by ministers André Mendonça, Cristiano Zanin, Dias Toffoli and Gilmar Mendes. The divergence was opened by Minister Alexandre de Moraes, who defended a partial approval of the agreement: for him, it was not legally viable for the STF to examine the clauses dealing with the concrete effects of the trade negotiations. He was followed by Ministers Flávio Dino and Edson Fachin and Minister Cármen Lúcia.
The case was handled within the framework of an action proposed by the Presidency of the Republic which questions the constitutionality of the provisions of Law 14.182/21, which regulated the privatization of Eletrobras. According to the government, the rule imposed a disproportionate burden on the union by limiting any shareholder’s voting rights to 10%, even when the public entity owns more than 40% of the company’s common stock.
The agreement was concluded in the first half of the year, after more than a year of negotiations. The government obtained the right to appoint three of the ten members of the board of directors and one of the five members of the Budget Council.
In return, Axia redefined its obligations towards Eletronuclear. The company is no longer obliged to invest in the construction of the Angra 3 nuclear power plant, if the government decides to complete the work. However, the company remains obliged to financially support the Angra 1 nuclear power plant.
This point has become the main fact of uncertainty for Eletronuclear. The public company is awaiting the decision allowing the issuance of debentures of 2.4 billion reais, an operation considered by the government as the only immediate way to replenish the company’s cash flow.
The company faces cash flow difficulties to finance actions related to extending the useful life of Angra 1, a project considered strategic to keep the plant in operation for the next 20 years.
The assessment within the government is that approval of the deal, even partial, would pave the way for the issuance of bonds. Technicians say, however, that restricted validation can make it difficult to execute financial points, reducing the legal security of the operation and further delaying the influx of resources.
Debentures are debt securities issued by companies to raise funds, functioning as a loan that the investor gives to the company, thereby becoming a creditor.
About The Author
