Cia. Paranaense de Energia fell the most in nine months after Parana state Governor Beto Richa demanded the power utility to suspend a rate increase as Brazil faces protests over rising consumer prices.
Shares of Copel, as the electricity company is known, plunged as much as 15 percent to 26.76 reais at 11:41 a.m. in Sao Paulo, the biggest intraday drop since September. It was the worst performance today on the benchmark equity gauge Ibovespa (IBOV), which retreated 2.1 percent.
Richa said yesterday in a post on his Facebook page that he ordered Copel’s board of directors to suspend a rate increase of as much as 15 percent while he discusses the amount of the raise with Brazil’s power regulator Aneel. The state owns 31.1 percent of Copel, according to the Curitiba-based company. A
“The news is extremely negative as it underscores political interference and may bring heavy losses to Copel shareholders,” Marcelo Britto and Kaique Vasconcellos, analysts at Citigroup Inc., wrote in a note to clients today.
Protesters across Brazil have demanded free public transport, better public services and a crackdown on corruption. Last night, about 3,500 people participated in a protest in Curitiba, the capital of Parana, according to police.
Copel’s profit trailed analysts’ estimates in four of the past five years, data compiled by Bloomberg show. The utility’s adjusted net income declined 40 percent to 700.7 million reais ($309.5 million) in 2012 from 2011.
To contact the editor responsible for this story: David Papadopoulos at email@example.com