Publications
Publications
- March 2002 (Revised July 2004)
- HBS Case Collection
Price of Light, The: Privatization, Regulation and Valuation in Brazil
Abstract
Asks students to produce a valuation for Rio Light, a Brazilian power company that is state owned and to be sold in March 1996. If successful, the privatization would bring in over $2 billion to the Brazilian treasury. But success was far from assured. Members of the financial community suggested that the minimum bid established for the upcoming auction was too high, particularly given the lack of regulation before privatization and the underlying volatility of investments in Brazil. Elena Landau's attempt to resolve the crisis was a renegotiation of the terms of sale. Immediately, financial investors and strategic investors like Steve Shuler of Houston Industries Energy worked to incorporate the revised terms into their valuation models to decide whether Rio Light was worth pursuing. Time was short and billions of dollars were at stake.
Keywords
Citation
Dyck, Alexander. "Price of Light, The: Privatization, Regulation and Valuation in Brazil." Harvard Business School Case 702-055, March 2002. (Revised July 2004.)