By Brazil Stock Guide – AXIA Energia (B3: ELET3/ELET6) called a shareholders’ meeting for December 19 to vote on a complex restructuring of its capital. The company plans to distribute part or all of its R$39.9 billion (US$7.1 billion) in profit reserves through a bonus in newly created redeemable and convertible preferred shares. The proposal comes three years after Brazil raised R$33.7 billion (US$6.0 billion) in the company’s privatization (Eletrobras), which transformed AXIA into a widely held corporation with no controlling shareholder. Market participants also see the plan as a move to distribute value before a potential dividend-tax law comes into effect.
Two-Layer Structure
The plan creates two new preferred classes. The first is PNC, a preferred share with voting rights, redeemable at the ON share price and mandatorily convertible into common shares by 2031 at a 1:1 ratio, following an annual conversion schedule. The second is PNR, redeemed immediately and compulsorily to fund the 10% dividend premium attached to the existing PNA and PNB classes. Under the proposal, each PNA converts into PNA1 + PNR, and each PNB into PNB1 + PNR, keeping the same rights and adding 100% tag-along protection.
In the official document, Eduardo Haiama, chief financial and investor relations officer, states that the plan reinforces AXIA’s commitment to value creation and disciplined capital allocation. The transaction distributes reserves without drawing cash, while the new PNC class gives the company flexibility to manage voting concentration until its full elimination in 2031. The board may also redeem PNCs at any time at the prevailing ON price, allowing adjustments to voting power. The plan changes the poison pill to focus on voting-capital concentration, protecting AXIA’s dispersed shareholder base.
Conversion Schedule Through 2031
The conversion timetable requires at least 4% of outstanding PNCs per year from 2026 to 2030, followed by 80% in 2031, extinguishing the class. The PNR redemption value equals 10% of the capitalized amount (VC) divided by the total number of shares (TA) outstanding before the meeting, according to the company filing.
ON shareholders receive PNCs in proportion to their current stakes, with no immediate dilution. Preferred holders receive PNA1/PNB1 plus the PNR cash payout. The market gains visibility into future capital treatment, while enhanced governance protections may draw more institutional investors.
Who Controls AXIA Today
AXIA became a corporation with no controlling shareholder after the privatization. The federal government remains a relevant minority investor but is capped at 10% of voting rights, the same limit applied to all shareholders. The power rests with the market, dispersed investors, and the board.