If privatized as announced, the state-run company will become a corporation with dispersed ownership
11/22/2022
/i.s3.glbimg.com/v1/AUTH_37554604729d4b2f9f3eb9ad8a691345/internal_photos/bs/2022/s/i/70U2WdRKACwBo88uBGzw/copel-reproducao-facebook-copel.png)
Copel is seen by the market as a solid company with good governance — Foto: Reprodução Facebook Copel
The decision of the government of Paraná to privatize Copel by trading shares held by the state in the financial market puts the company in a club that is no longer small: that of companies without a defined controlling shareholder, which may give investment capacity to the state-owned company, besides guaranteeing dividends to the state of Paraná, which remains a relevant shareholder.
The story sounds familiar, and it is. The model is the same recently used by the federal government to privatize Eletrobras. Considered by the market as a solid company with good governance, Copel can become a strong “competitor” to Eletrobras in the electric sector, by adopting a model that was also used by Vibra Energia (formerly BR Distribuidora), Vale, and Embraer, among others.
In addition, privatization can guarantee installed capacity for the company. A rule established a few years ago required Copel to give away the shareholder control of the Foz do Areia hydroelectric plant, the company’s largest, with an installed capacity of 1.6 gigawatts.
The plant’s concession contract expires in September next year. After this date, power plants and state-owned concessionaires can renew the grants for 30 years, as long as they privatize most of the operations. In this case, Copel would have to offer to the private sector at least 51% of Foz do Areia’s operations, becoming a minority shareholder.
Without the restraints of the rule made for state-owned energy companies, Foz do Areia would continue in the hands of the company, which aims to be 100% renewable. Recently, Governor Carlos Massa Ratinho Jr. stated that Copel will study to get rid of a coal-fired operation (Figueira, of 30 MW).
The company is also studying to get rid of the 469-MW natural gas-fired Araucária thermal plant in order to invest in wind and solar plants — which is one of Eletrobras’s plans to advance in power generation.
In a note, the government reinforced that the state of Paraná will remain the largest shareholder (with at least 15%) and will also have a special golden share, with veto power, which aims to ensure investments in Copel Distribution, today the main arm of the company.
Sources consulted by Valor indicate that the government will have no difficulty in approving the proposal, since the current governor Ratinho Júnior was reelected in the first round with almost 70% of the votes and has a majority in the Legislative Assembly.
The privatization would also strengthen Paraná state’s cash flow, which, like all other states, was affected by the drop in revenue caused by the reduction of the sales tax ICMS rate levied on fuels after the product was classified as an essential item. This reduction was one of the measures adopted by the federal government to reduce the impact of high fuel prices on inflation.
Mr. Ratinho Jr. signaled last month that he could relinquish control of Copel. Without the strong opposition of the people of Paraná, with less cash and investment plans, the government put the company up for sale, waiting for the funds from the stock offer and future dividends. Today alone, with the announcement of the privatization, the company appreciated about 20% on the stock exchange.
*By Robson Rodrigues, Fábio Couto — São Paulo, Rio de Janeiro
Source: Valor International