Message-ID: <12738405.1075849800985.JavaMail.evans@thyme> Date: Wed, 28 Feb 2001 01:56:00 -0800 (PST) From: rob.gay@enron.com To: peter.anderson@enron.com, peter.weidler@enron.com, john.novak@enron.com Subject: FW: Tourinho & Sampaio sacked Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Rob G Gay X-To: Peter N Anderson, Peter E Weidler, John Novak X-cc: X-bcc: X-Folder: \Randall_Gay_Nov2001\Notes Folders\All documents X-Origin: GAY-R X-FileName: rgay.nsf ---------------------- Forwarded by Rob G Gay/NA/Enron on 02/28/2001 02:08 AM --------------------------- "Rivera, Nancy A." on 02/27/2001 12:21:00 PM To: "'Gay, Rob (Enron)'" , "'Anderson, Peter'" , "'Dutt, Ranabir'" cc: Subject: FW: Tourinho & Sampaio sacked FYI > ** Tourinho Exit Could Affect Power Privatizations - Brazil ** > > (BNamericas.com) - The dismissal of Brazil's mines and energy minister > Rodolpho Tourinho could affect the planned privatization of electricity > companies in a negative or a positive way, either accelerating or > stagnating the process depending on his replacement. > > The market reacted negatively to Brazilian President Fernando Henrique > Cardoso's sacking on Friday (Feb.23) of Tourinho and social security > minister Waldeck Ornelas, and the subsequent resignation of Firmino > Sampaio from the presidency of state power holding company Eletrobras > president. > > Directors and presidents of all federally owned power companies, such as > Eletrosul, Eletronorte, Furnas and Chesf, could also be replaced as a > consequence of infighting within the ruling coalition government. > > Electricity company shares fell by up to 4.4% on the Sao Paulo stock > market, as was the case with Parana state integrated power company Copel, > as well as Cemig and Celesc, which later recovered. Eletrobras shares fell > 1%-plus on Friday but closed the day stable. > > The repercussions of Tourinha's departure - which is a response to raising > tensions within the fractious four-party ruling coalition ahead of 2002 > presidential elections - will be felt Thursday and Friday when trading > resumes in Brazil after the Carnival holiday. > > The two ministers were allied to senator and ex-governor of Bahia state > Antonio Carlos Magalhaes of the conservative Liberal Front Party (PFL), > with which the directors and presidents of companies controlled by > Eletrobras are also connected. > > If Cardoso decides to break with Magalhaes there could be a virtual > restructuring of the state electricity sector, controlled for more than 20 > years by the Bahian politician. However, some sources say that another PFL > faction, led by Jorge Bornhausen, is negotiating with Cardoso to ensure > the continuity of the alliance with Cadoso's social democratic party PSDB. > > Other sources, cited in local press, sustain that while Magalhaes > maintains his network of collaborators in Eletrobras, Cardoso will not be > able to break with him. > > Magalhaes' influence in the country's electricity system dates back to > 1976, when the military government of general Ernesto Geisel occupied the > Eletrobras presidency. Since then Magalhaes has maintained his influence > and collaborators in the state electricity company. > > Eletrobras controls 14 companies in all, among them generators Furnas, > Chesf and Eletronorte, as well as Eletronuclear, which owns the nuclear > centers Angra 1 and 2 and transmission company Eletrosul. > > By staff reporter Alejandro Tumayan > Business News Americas (BNamericas.com) > > >