Brazil probe likely to hamper Eletrobras asset sales

Several graft and bribes probes into Centrais Elétricas Brasileiras SA could delay asset sale plans at Brazil’s state-controlled power holding company, analysts and lawyers said on Wednesday, underscoring mounting caution among potential buyers.

The course of federal and internal probes into accusations that government and company officials received bribes or help facilitate contracts and funnel part of the proceeds into ruling coalition parties could deter potential bidders from targeting assets involved in the investigations, lawyers said.

In addition, poor corporate governance standards at the company, known as Eletrobras, and some of the subsidiaries that have been put up for sale remain a concern among interested parties, they said.

The asset sale plan is seen as key to help rebalance the finances of Eletrobras after the ruling Workers Party, which governed Brazil over the past 13 years, forced the company to enter money-losing segments and overspend in others.

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