Brazilian Eletrobrí¡s Shares Now Traded at NY Stock Exchange

Eletrobrás, Brazil Eletrobrás (Centrais Elétricas Brasileiras), Brazil's state-controlled power and distribution company, was listed this Friday, October 31, on the New York Stock Exchange (NYSE) through the use of American Depositary Receipts (ADRs).

An ADR is a receipt that, like a stock certificate, represents an ownership interest in non-U.S. securities. For example, the holder of a listed ADR in Eletrobrás has access to an underlying share in Eletrobrás stock in Brazil.

As part of the listing process, Eletrobrás and its depositary, JPMorgan Chase, entered into a Deposit Agreement. Eletrobrás also entered a listing agreement with the NYSE and was required to prepare SEC filings to register the securities under the Exchange Act, a step concluded last month.

This was a challenge for a Brazilian company as large and unique as Eletrobrás, including the challenge of preparing detailed financial statements in accordance with U.S. GAAP (generally accepted accounting practices). However, the company deemed the effort worthwhile to raise its international profile.

"Listing on the NYSE is in line with our strategy of becoming an international company," said Luiz Augusto Figueira, Deputy CFO of Eletrobrás. "We received Congressional approval earlier this year authorizing us to act outside of Brazil, and Clifford Chance played an important role in helping us achieve today's milestone."

"Our presence in Brazil was crucial to us being able to service a client as large as Eletrobrás, which has operations throughout Brazil," said Anthony Oldfield, managing partner of Clifford Chance's Sao Paulo office, which helped Eletrobrás to be listed at the NYSE.

"We made a decision to establish a Clifford Chance office in Brazil ten years ago – well before many law firms began eyeing this market just in the last year or so. The long term commitment we've demonstrated, and the high level of client service we've delivered here, is something we're very proud of."

U.S. investors often prefer ADRs to the non-U.S. securities that they represent because they trade and settle in the United States as if they were a U.S. security. They are traded in U.S. dollars, and dividends on the underlying securities are converted into U.S. dollars.

Sara Hanks, a partner in Clifford Chance's Corporate Finance practice in New York, says that unlike the traditional route to an NYSE listing – an initial public offering – the Eletrobrás listing was done without capital-raising.

"Eletrobrás is obviously one of the largest companies in South America and incredibly well capitalized," said Ms. Hanks. "Listing itself on the NYSE allows our client to raise its profile in the United States and encourage more trading in the company's securities. This is a great day for them."

Tags:

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Brazil Gets Lion Share of Foreign Investment in Latin America

Foreign direct investment (FDI) in Latin America and the Caribbean was record last year, ...

Brazil’s New President to Rule a Country with Boundless Ambitions

The last few decades have witnessed a variety of efforts to encourage the multilateral ...

Will Lula Leave Brazil in Safe or Unsafe Hands?

Politics is an ongoing process that never stops and the democratic system of holding ...

The Russians Have Arrived. They Want to Make Deals with Brazil.

Accompanied by a business mission, the Prime Minister of the Russian Federation, Mikhail Fradkov, ...

Brazil’s Deadbeats Grow 13%

In comparison with June, consumer delinquency in Brazil was down 3.7% in July, maintaining ...

A Loud Protest Against Too Many Taxes in Brazil

Over 100 institutions representing industry, commerce, services, agriculture, and transportation have launched a campaign ...

Prosecutor and Police Try Last-Minute Maneuvers to Keep US Pilots in Brazil

Brazil’s Public Attorney Office and Federal Police are doing their best to prevent that ...

Favela in Rio, Brazil

Slavery Is Alive in Brazil While People Keep Living in Favelas and Streets

Overshadowed by the Pope’s visit to Brazil, the 119th anniversary of the Abolition of ...

India rocket on launching pad

Left Behind, Brazil Talks Space Cooperation with India

Cooperation between Brazil and India in the space area was the theme of a ...