Minas Gerais Audit Court Clears Copasa Share Sale for Privatization

Overview

• The state audit court TCE-MG unanimously authorized Copasa to launch a share offering and set strict oversight rules that include 48-hour notices of relevant developments and the power to halt the process if it finds irregularities.
• The decision moves the privatization into its market phase, with investors expecting Copasa to publish the offering prospectus in the coming days.
• Copasa has pre-registered candidates for a reference shareholder, and Aegea and Sabesp have filed to participate.
• Under the model approved by law, a reference investor is expected to buy 30% of Copasa, and all sale proceeds go to the state treasury to help pay or renegotiate Minas Gerais’s federal debt, reported at about R$185.8 billion.
• TCE-MG also ordered Copasa to map towns that may be billed for sewage without service and to craft a plan to improve water and sanitation in public schools, with the next steps being the prospectus release and selection of the 30% reference investor under ongoing review.