RIO DE JANEIRO (Reuters) – The board of Brazilian state-run power firm Eletrobras has approved an extraordinary shareholders meeting to decide upon a capital increase of 9.99 billion reais ($2.42 billion) via a follow-on share offering, the firm said on Monday.
In a securities filing, Centrais Eletricas Brasileiras SA
The federal government would subscribe to a minimum of 4.054 billion reais of the new shares, the firm said. The proceeds from the follow-on would be used to reduce debt and execute the company’s five-year strategic plan, the company added.
It said the government’s participation in the offering would be done through so-called AFACs, a mechanism which allows loans by the federal government to turn into equity capital, reducing the firm’s debt load.
(Reporting by Gram Slattery; Editing by Muralikumar Anantharaman)