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Eletrobras Seeks Compensation ‘Close to’ 30 Billion Reais

Oct. 31 (Bloomberg) -- Centrais Eletricas Brasileiras SA, South America’s largest power producer, expects to receive “close to” 30 billion reais ($14.7 billion) in compensation after the government changed concession rules.

“Tomorrow will be an important day because we’ll know how much the compensation will be and we hope it’ll be close to the book value of our assets,” Chief Executive Officer Jose da Costa Carvalho told reporters in Brasilia today. The book value of the assets is 30 billion reais, he said.

Eletrobras, as the state-controlled company is known, is waiting for the government to publish tomorrow terms of concessions after President Dilma Rousseff announced in September a package that aims to cut power prices by as much as 28 percent. Eletrobras is one of the three companies with most assets facing concession renewals under the new terms.

Eletrobras rose 2.9 percent to 16.47 reais at 12:30 p.m. in Sao Paulo, heading for the biggest daily increase since Aug. 20. The stock is down 39 percent this year.

The two other companies with most assets facing concession renewals are Cia Energetica de Minas Gerais, or Cemig, and Cia Energetica de Sao Paulo, or Cesp.

To contact the reporters on this story: Mario Sergio Lima in Brasilia at mlima11@bloomberg.net; Helder Marinho in Sao Paulo at hmarinho@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

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