brazil investment forum · direct and indirect control 36 petrobras 30 eletrobras 16 banco do...
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Salim MattarSpecial Secretary of Privatization and DivestmentMinistry of the Economy
April 3nd, 2019economia.gov.br
Brazil Investment ForumMicro reforms to boost investment
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Our economy we will be recognized by trust, by promoting the national interest, the free market and efficiency. The trust that agreements and property rights will be respected.
Jair Messias Bolsonaro38º President of Brazil
Inauguration Speech, Jan. 01st, 2019
We will work towards macroeconomic stability, by respecting contracts, privatizing and balancing public budgets. Brazil’s market is still somewhat closed to international commerce and change this condition is one of the main commitments of this government.Speech in Davos, Jan 22th, 2019
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President Bolsonaro, Mar. 19st, 2019
The privatizations in Brazil aim to battle against corruption and to boost income and jobs. We keep following our campaign proposals: to take out from the Government everything that can be run by the private sector
Jair Messias Bolsonaro38º President of Brazil
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We will move towards a liberal democracy. We will open the economy and we will privatize.
Paulo Roberto Nunes GuedesMinister of the Economy
Inauguration Speech, Jan 02th, 2019
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The merger of 4 ministries resulted in...
...the Ministry of the Economy
Finance PlanningIndustry and
Trade Labor Ministry ofthe Economy
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Special Secretary for Productivity, Employment
and Competitiveness
Special Secretary for De-
bureaucratization, Management and
Digital Government
Special Secretary of the Federal
Revenue Service
Special Secretary of Finance
Secretaria Especial de
Desestatização e Desinvestimento
Special Secretary for
Social Security and Labor
Special Secretary for
Trade and International
Affairs
Ministry of the Economy
Special Secretary for Privatization and Divestment
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•Social security reform
•Oil transfer of rights
•Eletrobras Capitalization• Privatizations
• State financial restructuring
• Infrastructure concessions (PPI)
• Deleverage BNDES to privatize the lending market
• Reduce the debt
Government Priorities
R$ 1 trillion
To federalize regional SOE’s
Crowding in
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Domestic Federal Public Debt
R$ 3.8 trillion
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USD 20 billion
Privatization target for 2019:
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Ministry of theEconomy
Special Secretary for Privatization and Divestment
Secretary of Coordination and Governance of State-owned
Companies - SEST
Secretary for Coordination and Governance of Assets - SPU
134 State-ownedcompanies
743.322 properties
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13Sale of a large part of the asset portfolio...
...to reduce debt
SOE’s
subsidiaries
State-owned
companies
Other
state
assets
Listed equityinvestments
Properties$
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Assets to reduce the debt
R$ billions
85
270
990*
State-owned companies
Bank credit (IHCD)
BNDES loan
Properties 30
490
* Figures for illustrative purposes only.
Concessions 115
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•Privatizations 943Petrobras – Pasadena 562
Petrobras – Paraguay’s Distributors 381
•Divestments 646
Caixa FGEDUC - IRB 646
•Concessions 1.84412 airports 1.085
Railway North-South 703
4 Ports 57
Total 3.433
Privatization is already happeningUS$ (million)
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16The purpose of selling SOE’s...
... is to improve the competitive environment and reduce debt. Source: BCB Elaboration: SEST/SDD/ME
Domestic Federal Public DebtR$ trillion
1,11,2 1,3
1,41,5
1,51,6 1,7
1,9
2,1
2,9
3,43,7
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019*
3,8
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17In 2010, state privatization could havesaved more than 60% of our debt ...
... and would substantially change its profile.Source: BCB/SPE Elaboration: SEST/SDD/ME
Value of SOE’s relative to public sector net debtPublic sector net debt (R$ trillion)Value of state-owned companies / net debt
1,5 1,5 1,6 1,7
1,9
2,1
2,9
3,4
61% 59% 56% 54% 46%31%
28% 27%
2010 2011 2012 2013 2014 2015 2016 2017
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Constitution – Art. 173
“Except for the cases provided for in this Constitution, the direct exploitation of economic activity by the State shall only be permitted when necessary to the imperatives of national security or the relevant collective interest, as defined by law.”
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#State owned companies
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#State owned companies
Brazil 440
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#State owned companies
134
Brazil
Union
440
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#State owned companies
134
51.341
Brazil
Union
China
440
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23Federal state-owned companies Direct and indirect control
36 Petrobras30 Eletrobras16 Banco do Brasil03 BNDES02 Caixa01 Correios
18
28Non-dependent
Dependent
Companies under Federal Govt. controlState-owned companies dependent on the National TreasuryState-owned companies not dependent on the National TreasuryNon-dependent state enterprises with indirect control of the
Federal Govt.
Number of Subsidiaries
134 Federal State-ownedcompanies
Group
46DirectControl
88IndirectControl
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Source: SEST/SDD/ME
R$ 15 billion/year
The 18 dependent SOE’s burns a high bill to the taxpayer
• EBSERH• EMBRAPA• CONCEIÇÃO• HCPA
• CONAB• CBTU• CPRM• CODEVASF
• EBC• NUCLEP• INB• AMAZUL
• VALEC• TRENSURB• IMBEL• EPE
• CEITEC• EPL
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In the first nine months of 2018, the BB, BNDES, Caixa, Eletrobrasand Petrobras groups showed a combined profit of R$ 52 billion.
Source: SEST/SDD/ME
-32
5
25
52
2015 2016 2017 9M18
From Oct/15 to Dec/17, SOE’s went from losses to profits
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•Petrobras
•Banco do Brasil
•Caixa Econômica Federal
•BNDES
State-owned companies that won’t be privatized
• Ebserh
• HCPA
• GHC
• Embrapa
• Amazul
• Emgepron
• CPRM
• Imbel
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27Breakdown by Industry
Regional Development• Codevasf
Health• Ebserh• HCPA• GHC
Communication• ECT• EBC• Telebrás
Source: SEST/SDD/ME
39
20
18
14
7
7
6
5
4
4
3
3
3
1
Energy
Oil and Gas
Finance
Commerce and Services
Transformation Industry
Ports
Research, Development and Planning
Insurance
Transportation
Equity investments
Supply
Communication
Health
Regional Development
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Equity investments• 5283 Participações• BB Elo Cartões• Caixapar• Correiospar
Source: SEST/SDD/ME
Breakdown by Industry
39
20
18
14
7
7
6
5
4
4
3
3
3
1
Energy
Oil and Gas
Finance
Commerce and Services
Transformation Industry
Ports
Research, Development and Planning
Insurance
Transportation
Equity investments
Supply
Communication
Health
Regional Development
Supply• Conab• Ceagesp• Ceasaminas
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Transportation• CBTU• Trensurb• Valec• Infraero
Insurance• ABGF• BB Corretora• BB Seguridade• BB Seguros• Caixa Seguridade
Source: SEST/SDD/ME
Breakdown by Industry
39
20
18
14
7
7
6
5
4
4
3
3
3
1
Energy
Oil and Gas
Finance
Commerce and Services
Transformation Industry
Ports
Research, Development and Planning
Insurance
Transportation
Equity investments
Supply
Communication
Health
Regional Development
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Research, Development and Planning• Embrapa• Amazul• EPE• EPL• Emgepron• CPRM
Ports• CDC• Codesa• Codesp• CDP• CDRJ• Codern• Codeba
Source: SEST/SDD/ME
Breakdown by Industry
39
20
18
14
7
7
6
5
4
4
3
3
3
1
Energy
Oil and Gas
Finance
Commerce and Services
Transformation Industry
Ports
Research, Development and Planning
Insurance
Transportation
Equity investments
Supply
Communication
Health
Regional Development
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Transformation Industry• Araucária• Ceitec• CMB• Imbel• INB• Nuclep• Hemobrás
Commerce and Services• Ativos Gestão• BB Cartões• BB Turismo• BB Tecnologia e Serviços• Dataprev• E-Petro• Serpro
• PCEL• PEL• PFL• PIB BV• PNBV• PSPL• TI B.V.
Source: SEST/SDD/ME
Breakdown by Industry
39
20
18
14
7
7
6
5
4
4
3
3
3
1
Energy
Oil and Gas
Finance
Commerce and Services
Transformation Industry
Ports
Research, Development and Planning
Insurance
Transportation
Equity investments
Supply
Communication
Health
Regional Development
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Finance• Ativos S.A.• BAMB• BASA• BB• BB AG• BB Consórcio• BB Investimentos• BB DTVM• BB LAM
Source: SEST/SDD/ME
• BESCVAL• BNB• BNDES• BNDESPAR• BNDES PLC• Caixa• Emgea• Finep• Finame
Breakdown by Industry
39
20
18
14
7
7
6
5
4
4
3
3
3
1
Energy
Oil and Gas
Finance
Commerce and Services
Transformation Industry
Ports
Research, Development and Planning
Insurance
Transportation
Equity investments
Supply
Communication
Health
Regional Development
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Oil and Gas• Petrobras• BR• Bear• Brasoil• Gaspetro• Gás Brasiliano GBD• Liquigás• Logigás• PAI• PB-Log
• Pebis• Pemid• PIB Col• PM• PPSA• Transpetro• Stratura Asfaltos• TAG• TBG• Pbio
Source: SEST/SDD/ME
Breakdown by Industry
39
20
18
14
7
7
6
5
4
4
3
3
3
1
Energy
Oil and Gas
Finance
Commerce and Services
Transformation Industry
Ports
Research, Development and Planning
Insurance
Transportation
Equity investments
Supply
Communication
Health
Regional Development
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Energy• Eletrobras• Arara Azul• AmGT• Bentevi• Brasil Ventos• Breitener• Breitener Jaraqui• Breitener Tambaqui• BSE• CGTEE• CHESF• EDV IX• EDV V
• EDV VI• EDV VII• EDV VIII• Eletronorte• Eletronuclear• Eletrosul• Eletropar• Eólica Chuí IX• Eólica Hermenegildo I• Eólica Hermenegildo II• Eólica Hermenegildo III• Fote• Furnas
• Mangue Seco 2• Ouro Verde I• Ouro Verde II• Ouro Verde III• Termobahia• Termomacaé Comercializadora• Termomacaé• TGO• TSBE• TSLE• Ventos de Angelim• Ventos de Santa Rosa• Ventos de Uirapuru
Source: SEST/SDD/ME
Breakdown by Industry
39
20
18
14
7
7
6
5
4
4
3
3
3
1
Energy
Oil and Gas
Finance
Commerce and Services
Transformation Industry
Ports
Research, Development and Planning
Insurance
Transportation
Equity investments
Supply
Communication
Health
Regional Development
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Thank you!
economia.gov.br