SAO PAULO, June 8 (Reuters) - Brazilian state power company
Eletrobras is expected to raise around $6 billion
through a share offering with infrastructure funds from Canada
and Singapore among the bidders, according to two people with
the knowledge of the matter.
Canada Pension Plan Investment Board (CPPIB) and Singapore's
GIC, seldom seen in follow-on offerings, are poised to become
relevant shareholders in Centrais Eletricas Brasileiras SA, as
Eletrobras is formally known, after the offer, the sources said.
The share offering that will result in privatization of
Eletrobras, Latin America's largest utility, with the state's
stake shrinking to around 45%, is set to be priced on Thursday.
It will be one of the largest share offerings in the world this
year, behind the $10.7 billion IPO of South Korea's LG Energy
Solution Ltd and close to the $6.08 billion raised by Dubai
Electricity and Water Authority's IPO.
GIC will be one of the anchors in the share offering,
alongside traditional equity investors such as Brazilian asset
managers SPX Capital and Truxt, the sources said.
GIC and CPPIB are expected to join forces with asset manager
3G Radar, now Eletrobras' largest private shareholder with an
11% stake, to design a post-privatization strategy, the sources
GIC, CPPIB and 3G Radar's associated company, 3G Capital,
are investors that usually acquire control of companies. One of
the sources said 3G Radar, which has been an Eletrobras
shareholder for more than five years, has been sounding out
executives to join Eletrobras after the privatization.
Part of 3G Radar's 1.5 billion reais ($306 mln) in assets
under management comes from partners at 3G Capital, the
controlling shareholders in brewer AB Inbev and food
maker Kraft Heinz. 3G Capital executive Alex Behring has
a seat on 3G Radar's board.
CPPIB declined to comment on "market speculation".
3G Radar, 3G Capital and GIC did not reply to requests for
Other big Brazilian investors considered the offering but
have decided against it, including holding company Itausa SA
and industrial conglomerate Votorantim SA, according
to one of the sources. Itausa and Votorantim did not immediately
respond to requests for comment.
Investors have had to weigh threats to roll back Eletrobras
privatisation from advisers of Brazil's leading presidential
candidate in an October election, leftist former President Luiz
Inacio Lula da Silva.
As investors discuss the future Eletrobras strategy, they
need to consider the privatization governance framework. The new
bylaws include a poison pill mandating a costly tender offer if
an investor or investor group holds more than 50% of voting
There is wide consensus among the largest investors and
analysts, though, that unifying structures of Eletrobras'
largest subsidiaries would bring almost immediate and relevant
cost savings, but other details of the future strategy are not
Demand seems strong for Thursday's share offering, which
will be managed by the investment banking units of BTG Pactual,
Bank of America, Goldman Sachs, Itau Unibanco Holding SA, XP
Investimentos, Banco Bradesco, Caixa Economica Federal,
Citigroup, Credit Suisse, JPMorgan, Morgan Stanley and Safra.
($1 = 4.9044 reais)
(Reporting by Tatiana Bautzer; Editing by Christian Plumb and