RIO DE JANEIRO, Aug 22 (Reuters) - The privatization of Brazilian electric utility Eletrobras could raise up to 20 billion reais ($6.3 billion), Mining and Energy Minister Fernando Coelho Filho told Reuters, adding that the process may involve the sale of new shares.
"We are proposing the issuance of new shares and, by doing that, current shares would be diluted," he said in a late Monday interview, adding that one buyer may not be able to take a controlling interest.
His comments underscored the range of issues yet to be settled in the privatization of Centrais Eletricas Brasileiras SA, as the government's holding company is formally known.
The interview followed an Energy and Mines Ministry statement, which said the model and terms of the Eletrobras privatization are yet to be decided. It added that the government will remain a shareholder and reserve the right to veto some strategic decisions.
Details of the proposal are expected at a press conference in Brasilia at 10 a.m. (1300 GMT).
Still, the prospect of a privatization sent New York-listed shares of Eletrobras soaring in after-market trading on Monday, highlighting investor enthusiasm for the free-market reforms that President Michel Temer has embraced.
The government is comparing the Eletrobras proposal to the successful privatizations of planemaker Embraer SA and miner Vale SA in the 1990s.
Yet for many Brazilians the privatizations of that era were tarred by scandals in the telecommunications sector, and the subject remains politically fraught even as the government has opened airports, highways and ports to private investment.
The proposal to sell control of Eletrobras will be formally presented to the council of the government's Investment Partnership Program on Wednesday, a person with direct knowledge of the plan told Reuters on Monday.
The value of Eletrobras' equity stood at 31 billion reais at the end of May, according to the company's website. Brazil's federal government owns 41 percent of the company and a majority of its voting shares. State development bank BNDES owns about 20 percent of common shares and 14 percent of preferred shares.
The minister said the government's plan will not allow a single group or investor to buy a large concentration of shares.
"We will create a series of rules to democratize this capital, possibly limiting the maximum stake per company," Coelho Filho said.
$1 = 3.16 reais Reporting by Rodrigo Viga Gaier; Writing by Ana Mano; Editing by Brad Haynes and W Simon