Bloomberg — The chief executive officer at Centrais Eletricas Brasileiras SA abruptly resigned on Monday night in a move that puzzled investors in Latin America’s largest utility.
Wilson Ferreira quit and will be replaced by Chairman Ivan Monteiro, Eletrobras, as the Brazilian utility is known, said in a regulatory filing. The statement didn’t go into details on what triggered the departure, but some analysts hinted at growing tensions between Ferreira and the company’s board of directors.
Common shares of Eletrobras were down 3.4% in Sao Paulo at 12:25 p.m. local time, while dollar bonds due in 2030 fell 1.6 cent to 86.1 cents.
Eletrobras is among companies that have “quite active and demanding boards,” Citi analyst Antonio Junqueira wrote in a note. “Very active boards add a key layer of governance (needed) to corporations. They also can add a lot of friction, though,” Junqueira said.
Eletrobras didn’t reply to request for comment on the reasons for Ferreira’s exit.
Ferreira won praise from investors after he led Eletrobras through major cost-cutting programs when he was in charge of Latin America’s largest utility by market value from 2016 through 2021. He returned to the company after the Brazilian government sold a controlling stake last year.
Ferreira had also been under pressure from the Luiz Inacio Lula da Silva administration, which has questioned the privatization by the previous administration.
Monteiro, who previously had leadership roles at state-controlled companies Petroleo Brasileiro SA and Banco do Brasil SA, has a “top-notch curriculum” and had been leading the board, which should help him in the new role, according to Citi.
Ferreira’s exit “is a bump in the road,” said Junqueira, who has a buy rating for the stock. “The driver and the car are quite good and will move on.”
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