Equatorial's Strategic Stake in Copasa: A Bold Move Amidst Privatization

Equatorial, a Brazilian power company, secured a 30% stake in water and sewage firm Copasa for 5.59 billion reais. This move follows Minas Gerais' decision to privatize a major portion of Copasa. With intentions to further increase its share, Equatorial strengthens its position in Brazil's sanitation sector.

On Wednesday, Brazilian power company Equatorial announced it has secured the strategic investor role in Copasa's privatization, purchasing a significant 30% stake for 5.59 billion reais, or approximately $1.10 billion.

The initiative by Minas Gerais state aims to transfer Copasa's control, a utility servicing 12 million people, to private hands through a share offering initially valued at over $1 billion in May. Equatorial bid 49.03 reais per share, surpassing the state's minimum price while facing no competition after a consortium, including Aegea, withdrew from the process.

The state government, holding over 50% of Copasa, plans a secondary offer, potentially selling another 20% to broader investors, with pricing expected on June 11. Equatorial, already a key player in Sao Paulo's sanitation field post-privatization, intends to acquire up to 48 million more shares, potentially increasing its investment to 7.9 billion reais or $1.6 billion.