Brazil Eletrobras proposes equal shareholder dividend

RIO DE JANEIRO, March 31 (Reuters) - Brazil's state-controlled electricity company Eletrobras on Wednesday proposed giving equal treatment to holders of common and preferred shares for its 2009 dividend payment in a move aimed at boosting transparency.
Eletrobras (ELET6.SA) has for years set aside the equivalent of 6 percent of shareholder equity to pay dividends for holders of its preferred stock.

It will now set aside an equivalent amount for dividends for common shares, which are mostly held by Brazil's government, helping Eletrobras trim tax debts, Eletrobras Finance Director Astrogildo Quental said in an interview.

'We are going to take this to the shareholders assembly, which will approve dividend payments to common shareholders, though this will not affect the preferred shareholders at all,' Quental said.

The government holds around 80 percent of the company's common shares while private investors and the BNDES state development bank own the remainder.

Quental said the company is seeking $1.5 billion in financing for its plan to invest around 9 billion reais ($5.1 billion) this year. It has authorization from the government to borrow up to $2 billion, but has lined up $500 million in financing from the World Bank.

Eletrobras could either issue bonds or borrow the money from the BNDES, Quental said.

The company is hoping to become an investor favorite much like Petrobras (PETR4.SA)(PBR.N), which has become a Wall St. darling in recent years after its partial privatization in 1997.

Eletrobras' move toward equal treatment of shareholder dividends should help boost its perceived transparency.

But investors still worry about concentration of nearly all the voting shares in the hands of the government. In contrast, the government holds only slightly more than 50 percent of shares.

The company on Tuesday said net income tumbled 43 percent in the fourth quarter from the year-ago period as the real (BRBY) strengthened against the dollar.

Eletrobras' preferred shares fell 1.2 percent to 32.30 reais. Common shares (ELET3.SA) slipped 0.33 percent to 26.34 reais. (Reporting by Denise Luna; Writing by Brian Ellsworth and Guillermo Parra-Bernal; Editing by Gunna Dickson)

Wed Mar 31, 2010 1:55pm EDT

Centrais Eletricas Brasileiras S.A.
ELET6.SA
R$ 32.00
-0.60-1.84%
4:25pm EDT

Brazil Eletrobras proposes equal shareholder dividend