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UPDATE 1-Brazil Senate to vote on Eletrobras privatization on Thursday

(Adds explanation of privatization route)

BRASILIA, June 16 (Reuters) - A bill allowing the privatization of state-owned energy giant Eletrobras will be put to the vote on Thursday starting at 10 a.m. local time (1300 GMT), the head of Brazil’s Senate Rodrigo Pacheco said on Monday.

The bill has passed the lower chamber but has been changed in the Senate in its present form, which means it would have to return to the house and could run out of time.

The bill is a temporary decree issued by the government and must be approved in Congress by June 22 or it will expire.

The privatization of Latin America’s biggest power utility will be done by floating 60% of its shares on the stock market, up from 40% at present. That would dilute the state’s stake in the company, a plan that has met with opposition from politicians, mainly from the left. The federal government would retain a golden share to veto hostile takeovers and other strategic threats.

The government expects to raise roughly 25 billion reais ($4.95 billion) from the sale of shares, of which half will go to the Treasury and the other half to mitigating household energy costs in coming years.

Reporting by Maria Carolina Marcello Editing by Chris Reese and Diane Craft

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