Eletrobras Rallies on Voluntary Dismissal Plan: Sao Paulo Mover
Centrais Eletricas Brasileiras SA (ELET3) rose as its board approved a voluntary dismissal program for employees that is part of an attempt to cut costs after the government ordered the company to reduce rates.
Common shares of Eletrobras, as Brazil’s largest electrical utility by sales is also known, climbed 2.3 percent to 6.26 reais at 1:04 p.m. in Sao Paulo. A close at that level would be the highest since April 9. The Ibovespa (IBOV) equity benchmark added 0.3 percent.
The state-run utility announced in March a plan to cut costs by as much as 30 percent to resume profitability. President Dilma Rousseff ordered power companies last year to lower rates as part of an effort to curb inflation and spur growth in Latin America’s biggest economy.
“Investors welcome these efforts Eletrobras has been making to fit into the new rules,” Sandro Fernandes, a trader at brokerage Corval Corretora de Valores SA, said by phone from Belo Horizonte, Brazil.
Employees will be able to apply for the voluntary dismissal program from June 10 to July 10, according to a regulatory filing after the market closed yesterday. As many as 5,000 workers may be affected, Chief Executive Officer Jose da Costa Carvalho Neto told reporters yesterday in Brasilia before the board meeting.
Eletrobras’s revenue will fall 25 percent this year to 25.6 billion reais ($12.4 billion) from 2012, according to the average forecast of analysts surveyed by Bloomberg.
The measures announced by Rousseff last September include revised conditions for the renewal of licenses expiring between 2015 and 2017. The program may reduce power rates in the country by as much as 28 percent.
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