Eletrobras sells nuclear subsidiary stake to J&F in $98M deal

Eletrobras (NYSE:EBR) +2.5% in Wednesday's trading after saying it agreed to sell its stake in Brazilian government controlled Eletronuclear to J&F Investimentos, the holding company controlled by Wesley and Joesley Batista, for 535 million reais ($98 million).

J&F also will assume all guarantees held by Eletrobras (NYSE:EBR), including responsibility for repayment of 2.4 billion reais in local notes.

South America's largest utility had been seeking to sell Eletronuclear since its privatization as part of an attempt to reduce investments in the nuclear segment and focus on its core generation and transmission operations, while also removing potential liabilities and costs from its balance sheet.

"The sale value isn't significant for the case, but it makes the case cleaner in theory, as it removes some litigation from the balance sheet. At the end of the day, for the narrative, it was a good move," Morada Capital partner Murilo Arruda told Bloomberg.

J&F's energy subsidiary already is one of the largest private companies in the sector in Brazil, owning several power generation units, and reportedly is in talks to buy French utility EDF's Rio de Janeiro thermal plant.