By Brazil Stock Guide – Brazil’s President Luiz Inácio Lula da Silva said he will not privatize Correios while he is in office, stressing that the state-owned postal service must return to financial balance even if that requires deep management changes and partnerships with private companies.
Speaking to reporters at the Planalto Palace in Brasília on Thursday (18), Lula said he has no interest in maintaining a loss-making state company, while rejecting outright any sale of the postal operator. Instead, he left open the possibility of strategic partnerships or a shift to a mixed-capital structure, provided the federal government retains control.
“I have no interest in having a state-owned company posting losses,” Lula said. “I don’t think the Brazilian people, who have nothing to do with that company, should be paying for its losses.” He added: “As long as I am president, there will be no privatization. What there can be is the construction of partnerships with companies. I know there are Italian companies that want to come here to talk to Correios.”
Correios has posted losses of 6.05 billion reais from January through September, taking cumulative losses since 2022 to about 10 billion reais. The company is seeking new funding to stabilize its finances after years of operational and managerial difficulties.
Lula said he deeply regrets the company’s crisis and explained that the federal government has already changed its leadership. According to the president, further measures may include closing branches and reshuffling senior management if needed to restore balance.
“We cannot have a public company, no matter how important it is, running losses,” he said. “I always say a public company does not need to be the queen of profit, but it cannot be the queen of losses. It has to balance its accounts.”
The president also said he is prepared to replace executives if necessary. “We will take whatever measures are required, change every position that needs to be changed, and the person in charge will appoint people who have the competence to run Correios,” Lula said. He added that the minister for management and innovation in public services, Esther Dweck, has been tasked with delivering a recovered postal service within the timeframe set by the government.
Earlier this month, Brazil’s Treasury rejected a request by Correios for a 20 billion reais loan after banks demanded interest rates equivalent to 136% of the CDI, above the 120% ceiling set by the Treasury’s guarantees committee. On Tuesday (16), Finance Minister Fernando Haddad said the company had already submitted a revised financing proposal.
Correios is seeking a loan backed by the federal government to fund its restructuring and meet its target of returning to profit in 2027, as set by its new chief executive, Emmanoel Schmidt Rondon. Lenders expected to take part in the deal include Caixa Econômica Federal, Banco do Brasil SA (BBAS3), Banco Bradesco SA (BBDC4), Itaú Unibanco Holding SA (ITUB4) and Santander Brasil (SANB11). Asked whether the loan could reach 12 billion reais, Haddad said: “It could get to that.”
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