Post and Telebras privatization should take “two years or more” | Brazil

Nine national companies entered the privatization program: the list includes the Correios, Serpro (Federal Data Processing Service), Dataprev (Social Security Technology and Information Company) and Telebras. The state-owned telecommunications company says that the analysis process will study “partnership alternatives with the private sector”; according to Bolsonaro government officials, the process could take “two years or more”.

Telebras

The Telebras states in relevant fact which was communicated on Wednesday (21) by MCTIC (Ministry of Science, Technology, Innovations and Communications) about the privatization process. As President Jair Bolsonaro explained, state-owned companies will not be sold immediately: first, they will be the object of study within the PPI (Investment Partnership Program).

Telebras’ qualification for the PPI “would have the purpose of studying partnership alternatives with the private sector, as well as proposing efficiency gains and results for the company, with a view to guaranteeing its economic and financial sustainability”, says the state. It is based on statements by the Chief Minister of the Civil House, Onyx Lorenzoni; the Minister of Infrastructure, Tarcísio Gomes de Freitas; and the Special Privatization Secretary, José Salim Mattar Júnior.

PPI studies must be carried out within 180 days by an interministerial committee. The same will apply to other government companies such as Correios and Serpro: “each of them will be analyzed in order to verify which would be the best economic model to be adopted for each asset”.

Economy Minister Paulo Guedes said that the state-owned companies would be sold as early as 2019, but the process should take time. “Each project may take about two years or more for analysis”, remembers Telebras, “considering the need for several considerations and valuation”. In addition, the privatization of state-owned companies needs the approval of the Chamber and the Senate.

Telebras was created in 1972 to install landlines in the country; after the privatization of the operators, it was responsible for providing telecommunications networks to other companies, through its backbone with about 30 thousand km of optical fiber.

The state-owned company also takes internet to more remote areas and manages satellites such as SGDC, which was involved in a legal dispute. In 2018, it suffered a loss of R $ 224.8 million. Despite being controlled by the government, its shares are traded on the stock exchange; they closed up 65% with the expectation of privatization.

Telebras

15 state-owned companies will be in the privatization program

Bolsonaro said the post office will be the first state-owned company to be privatized. This is the list of the 9 state will enter the PPI:

  • post offices
  • Telebras
  • Serpro (Federal Data Processing Service)
  • Dataprev (Social Security Information and Technology Company)
  • Ceitec (Center of Excellence in Advanced Electronic Technology)
  • Codesp (São Paulo State Dock Company)
  • Ceagesp (Companhia de Entrepostos e Armazéns Gerais de São Paulo)
  • Emgea (Asset Management Company)
  • ABGF (Brazilian Guarantee and Guarantee Fund Management Agency)

In addition to these, there are six companies that had already been qualified to enter the PPI:

  • Coin House
  • Eletrobras
  • CBTU (Brazilian Company of Urban Trains)
  • Trensurb (Urban Trains Company of Porto Alegre SA)
  • Codesa (Dock Company of Espírito Santo)
  • Ceasaminas (Minas Gerais Supply Centers)

The government also plans to break up Lotex (Exclusive Instant Lottery), responsible for scratch cards; and sell a R $ 1 billion stake in Banco do Brasil shares. EBC (Empresa Brasil de Comunicação), which appeared on a list of state-owned companies to be privatized, was left out of the PPI and will continue to be under the tutelage of the government.

With information: TeleSynthesis. Updated 08/27.

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