(May 23): Itausa SA, Singapore sovereign wealth fund GIC and Equipav Saneamento SA are planning to jointly bid to become strategic investors in the privatisation process for Copasa, the sanitation company owned by the government of Minas Gerais, according to people familiar with the matter.
Under the current plan, each of the companies would account for about a third of the capital needed for the transaction, the people said, asking not to be named discussing non-public information. The three firms are shareholders in Aegea Saneamento e Participacoes SA, which is going to participate in the bidding with a minor stake to avoid increasing its debt load, the people said.
The plan is to adopt a model similar to the 2021 privatisation of Cedae, Rio de Janeiro’s sanitation company, in which a consortium led by the group secured a majority stake in the concession.
Representatives of Aegea, GIC and Itausa, the holding company for Brazil’s Setubal and Villela families, declined to comment. Equipav didn’t immediately respond to a request for comments.
Equatorial SA is still deciding whether to participate in the bidding process that will privatise Copasa, a Brazilian water utility owned by the government of Minas Gerais, now that its consortium partner, Sabesp, has dropped out, other people said previously.
Companies have until May 25 to bid, according to the official schedule for the privatisation.
See also: Japan’s Nikkon said to weigh going private with US funds to bid
Control of Copasa, known formally as Cia. de Saneamento de Minas Gerais, will be sold in a public offering in which Minas Gerais state could retain no more than 5% of the company, the company said in a filing. It now holds 50.03%, according to the firm’s website. Only the state will sell shares in the offering, and it may retain a so-called golden share, which grants its owner some veto rights.
A “reference/strategic investor” will be able to buy 30% of the company before the public offering, with the possibility for the same investor to buy more shares in the market during the public offering with a maximum of 45% of voting rights, according to the filing.
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