Reuters: Regulatory News: UPDATE 1-Brazilian utilities' shares jump as regulator mulls new compensation

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UPDATE 1-Brazilian utilities' shares jump as regulator mulls new compensation Nov 27th 2012, 18:00 Tweet Share this Email Print Related Topics Stocks » Regulatory News » Markets » Tue Nov 27, 2012 1:00pm EST * Regulator head says may revise terms of new contracts * Eletrobras up despite top private shareholder's sale BRASILIA, Nov 27 (Reuters) - Shares of Brazilian power utilities rose on Tuesday as the government said it may review what it pays to change the terms of concessions, easing some investors' concerns about an aggressive new electric sector policy. Shares of electric utilities Centrais Eletricas Brasileiras SA, known as Eletrobras, and Companhia de Transmissao de Energia Eletrica Paulista both gained more than 6 percent after the comments by a senior official. Electricity regulator Aneel is likely to revise the terms of renegotiated concessions if necessary before the Dec. 4 deadline for utility companies to sign the new contracts, agency director Romeu Rufino told reporters. President Dilma Rousseff has offered to extend leases expiring between 2015 and 2017 if power companies agree to a sharp reduction in electric rates, which are among the highest in the world. Companies are challenging the terms, complaining of inadequate payment for depreciated assets under the deal. Investors welcomed any signs of flexibility from the government, according to Guilherme Sand, a partner with Zenith Asset Management in Porto Alegre, but the sector's gains were limited by doubts about a sweeter deal on the concessions. Preferred shares of state-controlled Eletrobras have fallen nearly 70 percent so far this year but led gains in the sector on Tuesday despite news that its largest private shareholder was paring back its stake. Norwegian mutual fund manager Skagen sold 278,900 preferred shares of Eletrobras, it said in a Tuesday securities filing, reducing its stake to 14.82 percent from 15.22 percent. The transaction had a trade date of Nov. 26 and a settlement date of Nov. 29, Skagen said. Eletrobras shares gained for the third straight day on Tuesday, after a 47-percent drop over the prior five sessions. Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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