- Brazilian utility company COPEL is expected to undergo equity restructuring, potentially leading to the State of Paraná losing control and reducing its equity to around 10%.
- Dividend distribution will probably decrease until 2024, but the yield will still be satisfactory at current price levels.
- Despite trading at historically high multiples, COPEL’s share price still has potential upside in the medium term, and long-term operational efficiency could bring higher returns for investors.
- The restructuring is necessary for COPEL to raise funds to renew three important hydroelectric plant concessions, which are crucial for the company’s future cash flows.
- Regardless of the scenario, those who own the stock now should stick to them for a couple more years for the almost certain rewards.
Read the full article on Seeking Alpha