SUBJECT TO COMPLETION, DATED May 27, 2022.
P R E L I M I N A R Y P R O S P E C T U S S U P P L E M E N T
(To Prospectus dated May 27, 2022)
CENTRAIS ELÉTRICAS BRASILEIRAS S.A. — ELETROBRAS
Up to Common Shares, including Common Shares represented by American Depositary Shares
We are offering common shares (our “common shares”) in a global offering that consists of an international offering outside Brazil and a concurrent public offering in Brazil (the “global offering”). The international offering includes a public offering in the United States, which will be offered pursuant to this prospectus supplement and the accompanying prospectus. Our common shares are being offered directly or in the form of American Depositary Shares (collectively, the “ADSs”), each of which represents one common share. The Brazilian offering will be offered pursuant to the Instrumento Particular de Contrato de Coordenação, Colocação e Garantia Firme de Liquidação de Ações Ordinárias de Emissão da Centrais Elétricas Brasileiras S.A. — Eletrobras (the “Brazilian Underwriting Agreement”).
The offering of the ADSs is being underwritten by the international underwriters named in this prospectus supplement. ADSs sold in the international offering will be paid for in U.S. dollars. The common shares purchased by investors outside Brazil will be settled in Brazil and paid for in reais. The closings of the international and Brazilian offerings are conditioned upon each other.
BNDES Participações S.A. (“BNDESPAR”) will act as selling shareholder (the “selling shareholder”). The selling shareholder has the right to sell up to of our common shares (the “secondary offering”).
The international underwriters named in this prospectus supplement are underwriting the sale of ADSs, each of which represents one common share. The Brazilian underwriters are placing up to common shares, including common shares sold in the international offering, to investors outside Brazil. BTG Pactual US Capital, LLC, BofA Securities, Inc., Goldman Sachs & Co. LLC, Itau BBA USA Securities, Inc., XP Investments US, LLC, Bradesco Securities, Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Inc. and Safra Securities LLC will collectively act as international placement agents on behalf of the Brazilian underwriters (except for Caixa Econômica Federal) with respect to the offering of common shares (not including common shares in the form of ADSs) sold outside Brazil.
We have the right to sell solely for the purpose of covering over-allotments (greenshoe), if any, pursuant to the Brazilian Underwriting Agreement, in the Brazilian offering, subject of the agreement of Bank of America Merrill Lynch Banco Múltiplo S.A. upon notice to the other Brazilian underwriters, up to an additional of our common shares at any time for a period of 30 days from the date of the Announcement of the Initiation of the Public Offering (Anúncio de Início da Oferta Pública) at the offering price referenced on the cover page of this prospectus supplement, in aggregate representing up to 15% of the common shares initially offered in the Brazilian offering, which may represent 15% of the common shares initially offered in the global offering. There is no overallotment option in connection with the offering of ADSs.
In accordance with Brazilian law, the Brazilian offering includes and will be subject to a priority offering in Brazil pursuant to which our existing shareholders have the right to purchase our common shares in an amount that ensures their interest is not diluted as a result of the global offering, excluding treasury shares. The Brazilian government and its controlled entities (including the selling shareholder) have agreed to waive their rights to purchase common shares in the priority offering. Certain institutions that represent our and certain of our subsidiaries’ current and retired employees also have the right to purchase common shares offered, limited to 10% of the total number of common shares in the global offering. The price per common share under the priority offering was the same as the price per common share under this global offering, as indicated below. See “Summary — The Offering — Priority offering.”
Our common shares are listed on the São Paulo Stock Exchange (B3 S.A. — Brasil, Bolsa, Balcão) (“B3”) under the ticker symbol “ELET3” and on the Madrid Stock Exchange, through the Mercado de Valores Latinoamericanos en Euros (“Latibex”) under the ticker symbol “XELTO.” ADSs representing our common shares are listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “EBR.” On May 26, 2022, the last reported sale price of our common shares on B3 was R$44.00 per common share, equivalent to U.S.$9.21 per common share, assuming an exchange rate as of May 26, 2022 which is R$4.78 to U.S.$1.00. As each ADS represents one common share, the closing price of the ADSs on the NYSE on May 26, 2022 was U.S.$9.23 per ADS.
You should carefully read this prospectus supplement and the accompanying prospectus, together with any documents we incorporate by reference herein and therein, before you invest in our common shares or the ADSs. See “Risk Factors” beginning on page 12 and “Risk Factors” in our 2021 Form 20-F to read about factors you should consider before investing in the securities offered in this prospectus supplement and the accompanying prospectus.
Neither the U.S. Securities and Exchange Commission (“SEC”), nor the Brazilian Securities Commission (“Comissão de Valores Mobiliários” or “CVM”), nor any state securities commission, has approved or disapproved of these securities or determined if this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense. This prospectus supplement is not an offer to sell or a solicitation of an offer to buy any of our common shares in the Brazilian offering.
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Per ADS
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Per Common Share
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Total(1)
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Public offering price(2)
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U.S.$ |
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R$ |
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U.S.$ |
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Underwriting discounts, fees and commissions paid by us
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U.S.$ |
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R$ |
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U.S.$ |
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Underwriting discounts, fees and commissions paid by the selling shareholder(3)
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— |
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R$ |
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U.S.$ |
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Proceeds to us, before expenses(4)(5)
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U.S.$ |
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R$ |
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U.S.$ |
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Proceeds to the selling shareholder, before expenses(3)(4)(5)
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— |
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R$ |
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U.S.$ |
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(1)
For purposes of calculating, total amounts in reais have been translated into U.S. dollars at the selling rate reported by the Brazilian Central Bank (Banco Central do Brasil) (“Central Bank”) as of , 2022, which was R$ to U.S.$1.00.
(2)
The public offering price per ADS includes an ADS issuance fee of U.S.$0.05 per ADS that will be paid to the Citibank N.A., as ADS Depositary.
(3)
The selling shareholder does not expect to offer ADSs in connection with the global offering.
(4)
See “Underwriting” beginning on page 54 of this prospectus supplement for additional information regarding underwriting compensation and “Use of Proceeds” beginning on page 46 with respect to the application of the proceeds from the offering.
(5)
Without taking into consideration common shares to be sold in the overallotment option.
We expect to deliver the ADSs through the facilities of The Depository Trust Company against payment in New York, New York on or about , 2022. Delivery of our common shares, including common shares offered in the international offering, will be made in Brazil through the book-entry facilities of the B3 Central Depository (Central Depositária da B3) on or about , 2022.
Global Coordinators
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BTG Pactual
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BofA Securities
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Goldman Sachs & Co. LLC
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Itaú BBA
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XP Investments
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Joint Bookrunners
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Bradesco Securities
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Citigroup Global Markets
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Credit Suisse
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J.P. Morgan Securities LLC
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Morgan Stanley &
Co. LLC
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SAFRA
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The date of this prospectus supplement is , 2022.