Iguana SA, the Singapore sovereign wealth fund GIC and Equipav Saneamento SA are coordinating a joint proposal to become strategic investors in Copasa, the sanitation company controlled by the government of Minas Gerais, according to reporting on Friday.
Under the arrangement described, each of the three firms would be expected to provide approximately one-third of the capital necessary to complete the transaction. All three are shareholders in Aegea Saneamento e Participacoes SA, which is slated to participate in the bid but only with a limited stake intended to moderate its debt burden.
Those involved said the consortium plans to adopt a structure similar to the one used in the 2021 privatization of Cedae, the sanitation concession in Rio de Janeiro, in which a consortium led by the group secured a controlling interest in the concession.
Separately, Equatorial SA is assessing whether it will join the bidding process after its would-be consortium partner, Sabesp, pulled out of the transaction. The decision by Equatorial remains under consideration and was described as a point of uncertainty in the evolving roster of potential bidders.
Bids for control of Copasa, formally Companhia de Saneamento de Minas Gerais, must be filed by companies by Sunday, the deadline for interested parties to submit offers.
The sale of control will take place via a public offering. A regulatory filing indicates the state of Minas Gerais could retain no more than 5% of Copasa. The state currently owns 50.03% of the company, according to information on the company’s website. The filing also states that only the state will sell shares in the offering and that it may continue to hold a golden share, a mechanism that would provide veto rights.
The proposed structure, the planned split of capital, Aegea’s limited participation to manage indebtedness, the pending choice by Equatorial and the state’s potential retention of a small stake and a golden share together frame the key contours of the privatization process as bidders prepare final submissions.