Here's Why Shares of Centrais Eletricas Brasileiras SA Are Soaring Today
Shares of Centrais Eletricas Brasileiras SA (NYSE: EBR), or Eletrobras, as it's commonly known, surged on Tuesday and were up more than 46% at noon EDT. Powering the stock was a proposal by the government of Brazil to privatize the utility. Investors saw this as a sign that the company would be able to cut debt and operate more efficiently, which could help it generate higher returns in the future.
According to reports, Brazil's Mines and Energy Ministry plans to propose that the country sell control of Eletrobras. Currently, the federal government owns a 41% stake in the entity as well as a majority of voting shares. That stake could be worth as much as $3.8 billion for the government, which would give it the cash to help bridge its current budget deficit so it can avoid another credit rating downgrade as it attempts to pull out of one of its worst ever recessions.
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Source: Fool.com
